PayPal: Unprecedented Disruption in Payments and Financial Services
“In a telling move about the future of money, PayPal has added a Bitcoin entrepreneur to its board of directors,” CNN Money reports. Fintech entrepreneur Wences Casares joined the board on Tuesday, PayPal announced Wednesday. The move has been interpreted as the beginning of a new phase in PayPal’s timid love story with Bitcoin, which could conceivably culminate in open adoption.
“We’ve entered a period of unprecedented disruption in payments and financial services driven by the mass adoption of mobile technology and the digitization of cash,” said PayPal President and CEO Dan Schulman. “Wences’ long and successful track record as an international fintech entrepreneur with a focus on next-generation payment and cryptocurrency is a perfect fit for PayPal at this time. His unique line of sight into the future of commerce is ideally aligned with PayPal’s vision of transforming the management and movement of money for people around the globe.”
The fact that cryptocurrency and the transformation of money transfer are explicitly mentioned together in PayPal’s official announcement is a telling sign. According to CNN Money , the appointment of Casares to the PayPal board of directors is yet another vote of confidence in Bitcoin’s technology. PayPal, the leading company in Internet-based payments, had already shown interest in Bitcoin payments and the distributed blockchain technology that powers the Bitcoin network, and taken the first cautious steps toward integrating blockchain technology in its operations.
One of the clearest indications of PayPal’s interest in Bitcoin is Paypal’s subsidiary Braintree. The company, which was acquired by eBay (the former parent company of PayPal) for $800 million in September 2013 and became part of PayPal after the split, permits merchants to accept Bitcoin payments seamlessly in partnership with Coinbase. The Braintree Bitcoin payment service is currently in public beta.
“No doubt a financial technology visionary, Casares has become best known for pioneering Bitcoin in recent times and that’s exactly why PayPal has added him to its board,” notes TechCrunch. “It’s exciting to see PayPal, the daddy of online payments and a true disruptor when it started out, open itself up to these new possibilities.” Casares is well positioned to help PayPal in identifying and acquiring promising Bitcoin companies and unlocking new blockchain-based opportunities for its business worldwide.
“I am honored to serve on the board of an iconic global company dedicated to driving the transformation of money on a global scale,” said Casares. “I look forward to working together with the PayPal board and leadership team to continue to deliver their compelling vision.”
Casares is the CEO of Xapo, a Swiss company that offers Bitcoin digital wallets and debit cards. Xapo, which has raised $40 million to date, announced in May that it was relocating its corporate headquarters to Zurich, Switzerland, to take advantage of the country’s strong privacy and banking secrecy. Xapo’s primary deep cold storage vault is also located in Switzerland, with additional secure sites deployed around the globe.
The company takes aggressive initiatives to promote Bitcoin payments worldwide. For example, in April Xapo partnered with social network Taringa!, the second-most-popular social network after Facebook and one of the main destinations in the Latin American Web, to compensate its content-providing members in bitcoins, offering a service that could boost Bitcoin adoption in the region.
Members of the Bitcoin community have wondered if this is just the first of ambitious and aggressive initiatives by PayPal. For example, PayPal could integrate Xapo in its own operations, to complement Braintree’s merchant-facing infrastructure with appropriate consumer-facing services. Another possibility is that Xapo could be acquired and become a PayPal company.