PayPal took activist stances on issues from trans rights to racism. Here's how CEO Dan Schulman says corporates can blend profits and purpose.
- Insider spoke to PayPal CEO Dan Schulman about taking activist stances on social issues.
- Schulman says he learned from Richard Branson that companies can serve shareholders and the world.
- PayPal has supported transgender rights, opposed the Muslim ban, and banned white supremacists.
- Visit Business Insider’s homepage for more stories.
When it comes to brand values, some companies just ‘talk the talk.’ PayPal’s CEO is on a mission to walk the walk.
Ask any member of Dan Schulman’s team what he is up to on any given morning and you will probably get one of two answers: Sparring or sizing up the next big business opportunity.
With the electronic payments company he leads undergoing record-breaking growth and his executive podcast, Never Stand Still, now entering its fourth season, the 62-year-old chief executive of PayPal and martial arts exponent is a man on a mission.
Schulman has his sights firmly set on realising one lofty goal in his lifetime — “democratizing financial services” — corporate speak for making financial services more convenient, affordable, and secure for everyone and “not just a privilege for the affluent.”
Since he joined PayPal as the president in 2014 and CEO in 2015, the company’s bottom line has ballooned.
With COVID-19 accelerating consumers’ abandonment of cash en route to a cashless society, PayPal scooped up $277 billion in total payments volume in the fourth quarter of 2020, up 39% year on year, marking the firm’s strongest year in its history.
Follow a mentor
While Schulman is buoyed by PayPal’s healthy balance sheet, it is the company’s ability to positively impact social causes that drives him, which is something he discovered during a mentorship experience earlier in his career.
The veteran executive, who held senior leadership roles at AT&T, Priceline, Sprint and American Express, said he had a wake-up call in 2001 when he became the CEO of Virgin Mobile USA.
“I had the opportunity to work with Sir Richard Branson, an impactful mentor, to start a new company using the Virgin brand and focus on mobile phone technology for the youth market,” Schulman told Business Insider.
“It was at Virgin that I saw, for the first time, how a company could both serve shareholders and act as a force for good in the world. When I joined PayPal, I was clear that we would embed social purpose into what we do every single day.
“I learned a lot from Branson about being a champion for consumers. He inspired me to think about advocating for those who may not have a voice and to work towards making their lives better.”
Stand for something
Schulman understood early on that a recognizable brand would provide the necessary conduit though which otherwise unheard voices could be heard.
Since being appointed chief executive, PayPal has been instrumental in helping marginalized communities and has consistently enforced a zero-tolerance policy against “discrimination of any kind” both inside and outside the company.
Under Schulman’s five-year watch, the digital payments company has defended transgender rights (the ‘bathroom bill’), opposed religious discrimination (the Muslim travel ban) and confronted racism (by blocking white supremacist fundraising accounts).
In doing so, the PayPal boss has unwittingly earned himself informal membership of the ‘CEO activist’ club. He joins a growing number of corporate leaders who take a public stance on sensitive social and political issues ostensibly unrelated to their companies’ bottom lines.
But PayPal’s activism is in line with public demand.
Consumers are increasingly expecting brands to stand for something. As such, the principles companies espouse and the extent to which they practice them are just as much on trial as the products and services they are trying to sell.
The Edelman Earned Brand 2018 report found that 64% of consumers worldwide choose brands based on their stance on social issues. According to the study, these “belief-driven buyers” will “choose, switch, avoid or boycott a brand based on where it stands on the political or social issues they care about.”
But emphasis on brand purpose does have an unsavoury side, too, known as ‘woke-washing.’
‘Woke’ is a slang term for being aware of social injustice and, depending on which side of the political aisle you sit, can be either an insult or a compliment. By extension, woke-washing refers to performative action involving profit-driven companies that cynically co-opt social activism issues by running purpose-driven advertising campaigns without backing-up their flowery rhetoric with meaningful action.
At the 2019 Cannes Lions festival, Unilever CEO Alan Jope decried woke-washing as “polluting purpose.” Unsurprisingly, the socially conscious Schulman is not a fan of it either. “It’s important that company values aren’t just words on a wall. They must guide our actions and be acted upon whenever challenged,” he says.
Never stand still
In his teens, Schulman spent time in Israel where, as part of “youth military training,” he started learning Krav Maga, a martial arts system developed for the Israeli security forces, which he still practices every morning.
“A key tenet of the Krav Maga philosophy is that standing still is asking to be hit. If you stand still in business, your competition will catch up,” he says.
He wants to ensure PayPal doesn’t stand still.
The digital payment processor has recently made two significant forays: One into a coveted international market and the other into a burgeoning domestic one.
In September 2019, the People’s Bank of China approved PayPal’s acquisition of a 70% controlling stake in GoPay making PayPal the “first foreign payment platform to be licensed to provide online payment services in China.”
A little over a year later, in October 2020, the company introduced PayPal ‘Pay in 4’ to its digital wallet.
The ‘buy now, pay later’ payment option allows US customers to split the cost of purchases into four interest-free payments with no set-up fees or charges. (A ‘Pay in 3’ option is available to PayPal’s UK customers.)
Schulman has also been mindful to keep a watchful eye on the financial health and wellbeing of the people behind the products — PayPal employees.
Last month, he said that an internal survey found that two-thirds of US entry-level and call centre staff were living paycheck-to-paycheck and relying on expensive borrowing.
Motivated by this feedback, PayPal entered into an agreement with Even Responsible Finance, which grants PayPal staff access to their pay as soon as they earn it rather than having to wait for payday to arrive every fortnight.
PayPal also made every worker a shareholder — a valuable employee benefit as the firm’s share price has risen steadily over the past 12 months.
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