“It could be, you know, a $100 trillion market,” he said in the interview. “That’s sort of the market — total addressable market — we’re playing into. We may have, like, 1-2% share of that market today.
And as Venmo, PayPal’s popular mobile payments service, continues to partner with more merchants, he said there are no signs that disappointing holiday sales and a potential global slowdown will negatively affect the sector. The number of payments processed on the platform surged 80% year over year in the last quarter and Schulman thinks the company could process more than $100 billion worth of transactions in 2019.
“We live in the space of digital commerce and digital commerce is exploding still around the world,” he said. “There’s an explosion in digital commerce and we’re riding that wave. What we see is pretty positive.”
To support its growth, Schulman pointed out that Venmo has been focused on building partnerships with companies across a number of industries to better serve customers. The company already works with names like Facebook, Alphabet’s Google, Microsoft and Alibaba.
“People are thinking about how can they use technology to better serve customers,” Schulman said. “I think it’s going to be less and less about how does one company hyper-serve customers. I think the new way of the world going forward is how do companies take the best of their platforms [and] put them together to better serve companies.”
He also touched on competition brewing with FinTech services like Zelle, casting away doubts that it would make it any harder for Venmo to thrive. Zelle is the digital payments network owned by seven banks including J.P. Morgan Chase and Bank of America.
Schulman sees it as a sign that companies are deciding to work together more and share platforms, noting that Venmo also collaborates with other financial institutions. The differences between Venmo and Zelle, he pointed out, are how customers use both platforms. The average Venmo transaction is about $50 and done as many as five times a week. Zelle, on the other hand, handles larger transactions, typically $250 about once a month, he said.
“P2P, or peer-to-peer payments, is exploding in the market. It’s a multi-hundred-billion-dollar marketplace. This will definitely not be a winner take all,” Schulman said. “I think the two will live side by side and it won’t be a winner take all”
Additionally, PayPal is tapping into marketplaces around the globe and Asia is one of its fastest-growing regions, Schulman said. Those countries include India, China and Japan.
Building relationships with online markets like Amazon and Alibaba, where they are seeing 40% year-over-year growth, has been a key strategy for the digital commerce company to offset slowing growth that has affected eBay, PayPal’s former parent company that it continues to partner with, he said.
“But the real secret to Venmo is that it’s not just a payment transaction,” Schulman said. “It really is tying into this desire in the millennial generation to tie into your social network. So it’s really a social experience.”