Wednesday 13 November 2019

'What PayPal is all about is changing the face of money'

PayPal boss Louise Phelan is guiding her company as it pioneers moves towards the cashless society

PayPal boss Louise Phelan. Photo: Jason Clarke Photography
PayPal boss Louise Phelan. Photo: Jason Clarke Photography

Roisin Burke

There are three of us in this interview so it's a bit crowded. It's 8.30am and Louise Phelan has been up for hours. She hits the gym at 6.30 most mornings for a start.

It's unavoidable to note that she is dauntingly glamorous, all glossy blonde hair and vivid green eyes. The Garth Brooks fan is head of PayPal's European, Middle East and African empire (EMEA).

The push is on for PayPal to bring its online payments system into the next generation, beyond the couch and into shops, restaurants, hotels and cafes where customers will be able to pay for almost anything with a tap of their smartphone.

PayPal's PR director has flown over from London to sit in on our interview in Phelan's Blanchardstown office. He's a pleasant individual, but interjects frequently on ground where Phelan is capable of fielding questions for herself. She's well-prepared, rifling through a big sheaf of notes on front of her but responding with ease.

First off – what of her controversial views on graduates? She said less than a year ago what a lot of senior figures were thinking – that there was a "sense of entitlement" and a need to get real and wake up to what the world of work involved.

Well, there has been an almost Damascene conversion on this, it seems. "I would say that we've absolutely moved on significantly," she says now. "And there are a significant amount of graduates here that we are supporting and who are supporting our business and who are going to be future leaders of PayPal."

For the past six months, since not long after Phelan's controversial remarks, PayPal has been working with various universities on what it means for students to be "work-ready", she says.

PayPal is among 10 top multinationals including Apple, Facebook, Google and LinkedIn, that meet regularly to discuss the development of graduates.

The world's biggest transaction company, and its owner eBay, have a large and growing operation here, employing 2,300 people, with 500 more expected to join the Dundalk office by 2015.

Staff are about 50 per cent Irish and 50 per cent foreigners, serving a multilingual centre supporting Europe and beyond. She would like to add more to the Irish operation. "We're always looking for opportunities to grow the company in Ireland and EMEA. Our hand is always up."

When "the mothership" recently needed to bulk up in north American, she recruited and had 140 people trained and at their desks within six weeks. "Of the 140 people we took in, 50 per cent were off the live register. They're performing fantastically well."

PayPal's retention rate is 80 per cent, says Phelan, which is extremely high in a call centre where churn is common.

"We're mentoring our people, setting them up for a career, not just for a job. That's really important to us."

PayPal is pioneering the cashless future with a zeal that was lacking a few years ago when smaller but highly agile competitors flourished.

"We are changing the future of money," Phelan says. "At some point none of us are going to have a wallet."

The cashless revolution begins at home, and the Irish PayPal and eBay headquarters was the first campus in the global set-up to go cash free. Everyone signs up for a PayPal account when they start there and if you want a cup of coffee or a sandwich, you buy it with your smartphone or with a badge that has money charged up on to it.

Right now a mobile pay innovation called 'check-in' is trialling on campus and in businesses near PayPal's base on the outskirts of Dublin.

When you walk into a shop or a restaurant, your photo and profile 'checks in' with the vendor and you can pay for your goods in a heartbeat with your smartphone.

This appears to be one way the payments behemoth is being more dynamic in the face of competition from fast-growing start-ups and from Amazon Payments and Google Checkout. "It's a huge step forward in technology and a very important segue to us to bring that buyer and seller together, for vendors to know their customers," says Phelan.

"We have it in a number of small stores here, we're testing it out at our local hotel, we have it at a cafe in Dundalk, at Butler's Chocolate in Blanchardstown."

The timeline for rolling this out is "as fast as possible", says Phelan, while Mr PayPal PR interjects that it's important to get it right first. There have been attempts before, particularly in the US, that haven't gained traction.

PayPal also announced another major innovation last week. It's collaborating with Samsung to make its new Galaxy S5 mobile a way for customers to shop using their fingerprint as a login and doing away with passwords and codes. Ireland will be one of the markets where it rolls out, starting in April. "That's going to be huge," says Phelan.

While PayPal was arguably coasting a bit, other transaction start-ups were developing, not least the one started by Limerick brainiac brothers the Collisons, who invented Stripe.

Now mentioned constantly with a valuation of €1.27bn, Stripe is a user-friendly way for vendors to get paid by their customers. And sellers love it and compare it favourably against PayPal.

In fact, PayPal bought Stripe's biggest competitor, Braintree, last year.

"Competition is healthy," says Phelan. "Stripe is coming in and it's certainly a competitor, but, at the end of the day, PayPal is growing significantly, bringing in things like Check-In and Braintree, which are going to support us hugely on mobile and be a huge opportunity for us.

"And we're looking at opportunities for more acquisitions like Braintree and opportunities to grow PayPal," she adds.

Mr PR chips in to contend that with 133 million accounts globally, there is no competitor to PayPal's scale. Certainly it is immense compared to anyone else, having processed nearly €20bn in mobile payments alone last year.

PR man says PayPal's advances are thanks to huge changes progressed by Swiss boss David Marcus, who took over two years ago. Prior to that, Phelan agrees that PayPal wasn't as innovative as it should have been.

"Because we were growing customers by the second, we probably weren't as innovative as we could have been and should have been, because we were growing so fast.

"We're constantly looking at the customer, making sure we're taking in their voice to improve customer experience, especially here in Ireland.

"The innovative things we've done show we are growing and changing and being the future of payments and PayPal 3.0 for our consumers."

Ironically, (according to Mr PR), PayPal's original vision was to beam money between PalmPilots (remember them?) but the world wasn't ready for personal organisers, a kind of 1990s' precursor of smartphones and tablets.

"The world wasn't ready for Palm," says Phelan. "We all had them, tried them and said no, this isn't going to work. But the reality is now consumers are asking for this all the time, this is what consumers want."

Lately, activist shareholder Carl Icahn, an American corporate titan who took on Yahoo last year, has been attacking the PayPal/eBay business, demanding that it be broken up into two separate units, saying it is eroding value to not do so. In Ireland, PayPal and eBay share a campus.

"We're very comfortable that PayPal and eBay are together for a very good reason. We're very confident that we will continue to be together strongly," Phelan says.

Characteristically, Phelan is hugely engaged in networks of all kinds, both business and charitable, including business women's networks and mentoring. She's by far the most vocal of Irish female chief executives. Seeking input or comment from State Street's Susan Dargan or Vodafone's Anne O'Leary or Aviva's Alison Burns on what's happening in their own company or their industry space or on aspects of the economy that affect their business can be like pulling teeth.

It raises the question why top female CEOs appear to have so little to say for themselves in public discourse.

"Because it's not easy," Phelan contends. "You're putting your head above the parapet and sometimes you might get a slap on the top of it."

You can't help wonder whether Phelan's decision to put her head above the parapet and say things that need to be said has led to the heavy PR presence at our interview today. Multinationals typically like their Irish chiefs' commentary to be vanilla and as per signed-off diktat from HQ at Palo Alto or wherever in Silicon Valley (It's San Jose, actually, Mr PR helpfully points out, in PayPal's case).

Phelan got sign-off from San Jose to join the Ryanair board, where she and Julie O'Neill are a breath of fresh air at an organisation that until recently took a tiresome willy-waving machismo as its signature tone.

In fact, Paypal is planning a significant collaboration with Ryanair that will allow consumers to buy tickets with a few taps on their mobile. "We're hopefully going to do that very soon," she says.

It is also encouraging systems where its software is embedded on retailer sites so customers don't have to divert back to PayPal in the current faffy way to pay up. It would mean that, for example, Google-backed online car hire service Uber can build PayPal systems into its site and not have to divert customers away to PayPal itself in order to pay.

"The shopping experience is such a lovely one, so the last thing we want to worry about is the payment side – all the palaver. That's what we're trying to achieve."

PayPal's overlord David Marcus has indicated that Bitcoin, the controversial digital currency might be accepted in the future and eBay insiders told CNBC it was being considered. Phelan, who is giving a talk on digital currencies and Bitcoin at an event in May, starts to give her thoughts when PR man jumps in. It's not regulated, it's extremely volatile, he says.

The PayPal wallet is about things that are straightforward, easy to understand, and Bitcoin doesn't fall into that category. But it's keeping an eye on developments.

Her year-long presidency of Ireland's most powerful lobby group, the American Chamber, has the usual ambition: "The golden triangle of tax, talent and competitiveness" but especially the talent bit.

"Talent is the critical piece for companies coming in," Phelan says. "There is no point in me having 1,000 seats and not being able to fill them."

She expects movement from the Government on the Chamber's lobbying to take more people out of the 52 per cent tax rate in 2014. "Right now there is an opportunity for the lower-paid incomes in that 52 per cent band. We've had a pro-active response."

With her profile-generating success at PayPal and presence on the board of a top listed company, future opportunities have to be toothsome.

"There are certainly opportunities for me both within and outside PayPal. But right now, I have a job to do, I have another 500 to roles to fill up in Dundalk to deliver on my commitments to Ireland Inc and PayPal, so right now I'm very happy and comfortable where I am."

But then what? It will be interesting to see.

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