PayPal is headed for a total transformation, CEO says

Turning around an iconic company that has been stumbling is no small task. Sometimes, a turnaround never materializes. Other times, it happens very slowly. But every so often, a new CEO’s initiatives gain hold and reinvigorate the organization, and the one-time iconic company enters a new period of growth.

Investors in legendary digital payments company PayPal (PYPL) are waiting to see what one of those buckets it will fall into under new CEO Alex Chriss. Chriss is now officially one year into the top job, and has wasted no time shaking up the company’s internal mindset and leadership team. He is beginning to roll out new products to go alongside a revamped corporate logo and marketing campaign.

Yahoo Finance Executive Editor Brian Sozzi sits down with Chriss inside the Nasdaq MarketSite in Times Square to get the scoop on PayPal’s turnaround plan.

Video Transcript

Welcome to a new episode of opening bid.

I'm Brian Sazi.

Yahoo Finance's executive editor and we're coming to you from the NASDAQ market site in Times Square, New York City.

Love this studio, love being here.

Uh Before we get to our really special guest for this episode, I have to start.

Uh because October I is now here.

Uh and that means one thing doesn't mean pumpkin spice lattes or PSLS.

It means Tesla, Robo Taxi Day on 10 slash 10.

That's October 10th and really a lot of optimism on all things Tesla ahead of this event.

According to Yahoo Finance data, Tesla shares up 36% over the past three months ahead of this event.

People are expecting a cyber cab where you can just use your phone and call a cab, uh potentially a new cheaper car.

And at the end of the day, you get to see Elon pumping and high all things Tesla.

So lots of excitement, but I wanna poke a little hole in some of these things because with that excitement, you might just see ac news event if you're a T ball.

I think there are three things that could send this stock down after this big event first up at the event.

Where are all these cars coming from?

If I drop 70,000 80,000 $90,000 on a cyber truck, I'm not renting it out.

I'm not putting on this platform.

I don't trust, I don't trust my whole family members with a cyber truck.

So it's very important, I think for Elon to make it clear on where these cars are coming from.

Number two, safety of the full self driving system.

You've heard Elon talk a little bit about this in the past, but in order to get to full robo taxi mode, I think Elon really needs to articulate the safety aspects of operating a Robo taxi fleet.

What does it mean to the liabilities?

What it means to the financial statements of Tesla to be determined?

And then what is the cost of these initiatives?

Uh Really there's a lot of uh build out to say, to say the very least on all things.

A I could cost Tesla tens of billions of dollars according to Morgan Stanley analyst and longtime Tes Bull, Adam Jonas to make this Robo Taxi network come to life.

That's a lot of money, man.

That's just a lot of money that might hurt the company's profits.

So some food for thought on Tesla have its big uh investor Day.

Now let's get to our guest of the hour and that is paypal, Ceo, Alex Chris Alex.

Good to see you.

Thanks for sticking with me as I ran through all things.

Uh Tesla and Elon Musk.

So the day we're taping this, uh this is your one year anniversary.

I mean, you still look like the guy in, in the press release when the photo came out.

I mean, how's it been?

Uh Well, it's great to be here, Brian.

Thanks for having me and uh yeah, what a ride.

uh one year in uh it's been an incredible adventure.

Um We've made a lot of change and, and, you know, look all, all I can, all I can say is we are much stronger today than we were a year ago.

And so that's uh that's a good start.

If there was one word to stop your first year, what would it be?

You know, I think velocity is the thing I've really been focused on.

Um you know, when I got here, you know, obviously a great team, uh incredible company with incredible uh opportunity ahead.

But to be honest, just moving too slowly and, and the world that we play in this fintech world is so dynamic, so interesting with so much competition out there that if you're not moving quickly, if you're not innovating fast, then you're just gonna get left behind.

And so what I've really been focused on is building the right team, building the right uh organizing uh operating system for us to be able to move with velocity and, you know, look, we, we are uh we're not to green yet, but we are a lot faster now than we were uh six months ago.

And a year ago, you really came out of the uh blocks fast Alex making changes to the leadership team uh and doing some things that I maybe haven't seen other new leaders in a company do or at least at the pace that you made it.

Why was it so important to build that new team around you?

What were you looking for?

You know, in, in my experience, you, you have to have the team, everything starts with your leadership team and part of it is, is just mindset.

Uh I was looking for a team that had incredible product experience, uh really, really strong uh operating shops and a focus on innovation.

And, you know, I come from a product background, I love innovating for customers.

The reason that I joined paypal was, you know, have the opportunity with two sides of an ecosystem to innovate in ways that I don't think anybody else can.

And I wanted to surround myself with other leaders that had that same mindset and that same background.

And you're right, I've really gone top to bottom through the leadership team and there was not a single person uh on my CEO staff that was in the same job when I got here or, or hasn't been brought in new to the organization.

And So we're, we're getting stronger every day because we're a new team working together.

So it's been a lot of fun.

I wanna get into all things.

Uh business, of course, on paypal.

But like this is your first like CEO job, of course you are into it, leading a very large business there working with uh what Susan Garza and the CEO of into it, um rising the ranks over there through many years.

I mean, do you, did you get worried that I have to make every decision perfect out of the block?

Like I don't wanna screw this up.

Not at all.

I think if you do that, you get too tense, you start to question yourself.

Um You know, I, I really believe in, you know, one way door, two way door decisions and for most of the decisions, you just gotta move fast, you got to get through them, you've got to move with velocity, uh anything, you know, I really believe.

And this is something that I, I I've been preaching with the team is we can adjust.

We've got a clear idea of where our strategy is.

We can always adjust as long as we're moving forward and moving with, with velocity.

And I've made a ton of wrong decisions during, during this year even um or, or things that I would do differently, but we've been moving forward and again, we'll, we'll with agility find our path through, but moving forward is way better than questioning yourself and being worried about, uh, making a mistake.

How were you able to tell when something you, uh, started working on wasn't working?

I mean, are you a fell fast and move along type of guy?

Absolutely.

I mean, you know, there's, you, you gotta instrument, uh, everything that you're doing with the right data, the right analysis.

Um, again, some of the things that we're doing are long term bets that we don't know whether, whether they're gonna work or not.

But if you've got conviction of your strategy, conviction of where you're going, you gotta believe in yourself and you gotta gotta believe in the team, right?

I mean, this is actually one of the things that gets me the most excited about this business is we're creating the future.

Uh There is no playbook for this.

There is no nothing that's gonna tell us whether this is gonna work or not.

We get to define the future and that's, that's pretty darn exciting, convince us or convince the, the investing community that that paypal is no longer just payments.

Yeah, I mean, this has been one of the big things for me, you know, shifting the company and the mindset from just being a payments company to really working across commerce.

So what, what, what does that mean?

You know, I think if you think about what paypal was in the past, uh it really was about, you know, from a consumer standpoint.

Having that, that great button that eased a transaction made it frictionless, made it safe and secure and that still exists.

Or on a braintree processing side, it was how do we help large enterprises all the way down to small businesses process payments.

That is a payments company, but it's missing the biggest advantage that paypal has, which is we have hundreds of millions of consumers and tens of millions of merchants.

And we are the one company that can connect the dots between the two of them.

And that is commerce connecting the dots between merchants and consumers.

And so really our evolution as an organization and again, just scratching the surface.

But where I believe we will go is how do we enable that consumer to find the right product at the right time, have a personalized experience based on what they want their preferences, putting more money back in their pocket because they're getting a special reward or, or some sort of discount directly from the merchant.

And on the flip side, allowing the merchant to instead of spraying dollars into the ether and hoping that they're finding as many customers as they can be very targeted with personalized offers, personalized experiences.

And, and look, we think that there's going to be a future of commerce where, you know, you show up to could be a website, could be your social media, could be, you know, some special glasses that you're wearing and you have a personalized experience as a consumer that the merchant has directed directly to you with the right product at the right time, the right offer and that's revolutionizing commerce.

So if we're having this conversation again, a year from now on, on your second year anniversary, what steps will have you taken to reach that commerce world?

Well, we're already a good part on the way we've announced and brought in the right leadership to be able to build an ad network.

Uh So we'll continue to lean into that in order to actually build that network, you've got to build uh profiles about consumers.

So we're really leveraging the data that we have all with, with consumer uh consent and all giving them transparency into, you know, what, what we're building around them and allowing a consumer to be able to actually control their profile that then allows a merchant to have an API that allows them to construct their website, construct their checkout experience, construct any of the offers that they want where they can now match that right product, right?

Skew right.

Offer to the right consumer at the right time.

So you'll see that and, and we are, well, on that way, this does sound like a big mindset sh shift.

And I imagine that is happening internally.

Where are there businesses that you're just not going to be in as you try to pivot the company to to this new future.

You know, I think we, we, we are going top to bottom throughout the organization to figure out, you know, what's core, the, the company has done a lot of acquisitions.

Uh Some of them, we just got to reset our mindset on whether it was an acquisition for revenue growth or whether there's just a data asset around it that we should leverage.

And there are gonna be some businesses that, that aren't core to our strategy.

They may still be a good business, but it should be something that we exit.

And so we're, we're still going through that, that assessment right now.

I think the reality is like anything in, in life or in business, you've got to stay focused.

And it's one of the things that I've really tried to push the organization on is we are not short on opportunities at all.

Uh There are so many different places that we could play in in the, in the entire ecosystem of what we play in.

I want us to stay focused.

I want us to understand what's most important to us.

You, you started to see some of that also in sort of the second mindset shift that I've been pushing the organization on is instead of just building point solutions, let's play the bigger game and let's really build platforms.

And you saw that with our launch of fasting, right?

We, we revolutionized guest checkout leveraging our consumer ecosystem, bringing hundreds of millions of consumers and vaulted instruments to play where now merchants get a double digit lifting conversion by over their most challenging uh checkout experience, which is 60% of checkout.

So we built that as a platform and we're now seeing other processors being able to uh to experience and offer that to their merchants.

So again, a big mindset shift as we start to change the game for commerce, Alex, hang with us.

We're gonna go off for a quick break.

We'll be right back on opening bid.

All right, we're having a really fun chat here with, uh paypal's CEO, Alex Chris.

I guess I can still call you the new CEO of paypal.

I mean, this is officially your one year anniversary mark.

I mean, it doesn't feel like new, right?

It feels like you've settled in.

Well, I'll, I'll, I'll be, I'll take, I'll take the new moniker as long as I can.

I think it, uh it, it helps.

So you're not the only company doing a lot of stuff.

Uh How would you, I mean, I look at the competition, I call brutal.

I, or am I just over hyping?

I mean, this is like some of these competitors of yours are, are moving, who weren't even around five or 10 years ago, are moving really fast.

Yeah, I mean, to me, this is what makes it so fun.

I mean, we are in an incredibly competitive dynamic, uh environment, it changes every day.

Uh And, and what really you have to focus on is where do you build competitive differentiation and competitive modes.

And for us, this is where I've really tried to focus on how do we bring that consumer ecosystem and merchant ecosystem to bear.

And we've got lots of competitors that focus on consumers, lots of competitors that focus on merchants, but very few if any that can actually bring the two together.

And so again, we're being hyper focused on where we're going to win.

And you see that in some of our partnerships, I think there are a lot of partnerships we've announced even in the last 60 days that have really surprised a lot of people.

And they thought, hey, wait, I thought that was a direct competitor of yours.

Wait a second.

How come you're doing a partnership with them?

And I think I want people to take a step back and say we're actually playing a bigger game.

We're playing a game where it's all about commerce.

It's all about building platforms at scale and it's about leveraging the competitive advantages we have as an organization.

And sometimes that means bringing your, your competition in closer and making sure that they are a part of the journey with you.

I've always thought I probably have covered paypal and often on for maybe a little over 10 years, Alex and I've always thought Venmo was this underappreciated asset inside the company.

I don't think my views are alone, especially on, on the street.

What is, how will that evolve under your leadership?

Uh Your views are not alone.

I share them.

Uh It is, it is one of the most exciting assets that we have.

Uh you know, what a privilege to be able to run a business that has so much penetration into one of the most valuable demographics in the US, right, affluent young demographic where money is flowing in billions of dollars every month flowing into the Venmo ecosystem.

We've just not executed a very good monetization plan and this is not rocket science step one is just ensuring that all that money that's flowing in because you know, somebody, uh you know, gave you a payment for the pizza that you shared around the table, you can actually now take that money and pay it out so that could be tap to pay and be able to pay for that pizza in the store.

It could be ensuring that there's pay with Venmo.

Uh This is about getting debit card penetration up and running.

So we've made a bunch of innovation and a bunch of a bunch of progress on that.

Even in the last couple of course, see debit card penetration, uh increasing significant leasing pay with Venmo uh access, uh uh increasing significantly.

That's a first step.

A first chapter.

If I then look into the future of Venmo, one of the most, I think underappreciated things about the Venmo asset is that the relationship between consumers and merchants is something that I've been fighting and looking for for 20 years in my career, which is this connection between service based businesses and consumers and service based businesses are exactly what it sounds like.

It's the people that are walking your dog, washing your car, uh you know, cutting your hair.

These are people providing services and the way that they pay right now, often times is through an invoice, it's through cash, it's through old school mechanisms is the way they want to get paid now.

And our ability to not only make that transaction happen, but now start to build services around those businesses, enabling them to create appointments, create scheduling, create CRM.

All of those are services that these small solo preneurs micro business service based businesses need to be able to run and thrive.

Uh That's a big opportunity for us and a big monetization going forward.

I'm really hearing a different vision.

Uh you know, a couple of years from now paypal is just going to be a very different company.

I mean, should, should it be regulated different Lee Alex?

I mean, is just given the amount of money you're taking in, you might take in years down the line is paypal Bank.

Yeah.

Well, I think we're, we're pretty heavily regulated right now uh operating around the world.

So, you know, we don't have aspirations to be a bank.

It's not something that uh that we're focused on we're focused on the innovation, uh, and the way that we can enable commerce between consumers, we've got lots of bank partners, uh, that I think are regulated uh fairly in the way they are.

And, and we obviously have a huge, uh uh a huge amount of regulation across where we are.

Now.

I wouldn't change uh where we're going because it allows us to execute innovation with velocity.

How far down the rabbit hole do you want to go with crypto?

I mean, do you see paypal going toe to toe with a Coinbase?

And some of the um even I would even say Robinhood, you, you know, crypto to me is, is a, is a really important future element of commerce.

But it's a how right, really what it is is enabling commerce at faster speeds, uh high scale globally at a lower cost and any time that you can move money faster at lower cost, that's better for consumers.

And so we've taken the right steps in, we again, are, are uh doing it in the right way to be regulated so that we can move money safely and securely for our consumers and make sure that their money is protected.

But I think again, we're just scratching the service and really making it available from a payments perspective on a global scale to allow people to be able to transact anywhere in the world uh and do it fast securely and at low cost.

So you don't see, it doesn't sound like you see paypal morphing into some form of exchange where, hey, if I want to trade Bitcoin, I, I use paypal.

You know, I think we, we could dabble in that.

I don't think that's the big long term uh win for us.

I think for us, the real transformation is, you know, where am I in the world where I can create the right payment to any merchant anywhere else in the world, connect the dots between consumers and merchants and do it at much faster speeds, very securely and at lower costs for consumers.

Consumers right now are paying a ton in fees anytime they want to purchase cross border, anytime they want to purchase from a merchant around the world with inflation, working in different ways and in different geographies, it's just hard to manage money as a merchant.

Um and understand what you're paying for as a consumer.

I think we have an opportunity to, to really play a hand in that I got this question from the team.

So I'll put it to you before I left here uh to come to the NASDAQ, who changed the logo?

Were you the final decider on the logo?

You know, I have an incredible team.

It's one of the best parts of my job is uh uh is hiring people that are way smarter than me.

If I start making decisions on logos and branding and marketing, I mean, I hopefully you saw some of our incredible uh paypal everywhere campaign with, with Will Ferrell.

If I start making those decisions, uh We're in real trouble.

So my job is to surround myself with the absolute best talent in the world.

And if you look at the leaders, we've got, there are incredible.

I'm not making decisions on what, what, what was the inspiration behind it?

This is a big change.

I can't, I don't see it on the screen so I don't see it on the screen but furloughs that no paypal, it was always blue, some form of blue.

And actually, you know, I actually picked out this alpha I'm wearing before uh the logo change.

I set off to the side like a week before and then it came out with the logo change.

It's actually blue but it's black, it's black typed out.

I mean, what was your, I mean, you're sending it some form of signal to investors and, and consumers.

Look, we're, we're, we're simplifying the the best part about paypal that I think again, it probably misunderstood in the US is how powerful we are globally, right?

If you start traveling and I've had the opportunity in the last year to visit our offices and visit consumers and merchants around the world.

The same energy that I think people think about Venmo in the US is how people think about paypal when you work across Europe or work in, into Asia.

And so we need a, a logo and a and a uh a brand that uh just is universal and is something again, paypal is a top 40 brand in the world.

Uh That is a huge opportunity for us to just continue to lean in and make sure that people understand that paypal is the most rewarding way for them to pay, safest way for them to move money and we needed something that would work for us for the future.

Uh I can't say this is, this is a rare interview for you.

I mean, for the past year, you're, you've been head down like really working hard to re invent this company hiring product, you name it.

Who's Alex Chris after hours?

Well, first, just because, because you mentioned it, uh it was one of the biggest surprises stepping into this role was how many invitations I got to conferences and interviews and all sorts.

I could have spent every, every waking moment.

Uh I have an email timed.

I have an email time for my, for my next invite for you, Alex.

It's, it's unbelievable.

But uh you're right, I've said no to everything uh getting execution uh done getting the team around us and really starting to innovate for customers was my number one priority uh coming in uh into this year.

So I've said note about everything.

It's exciting to be with you today, but after hours, um you know, look spending time with family.

Uh trying to get a good workout in, uh, just to make sure that, uh, you know, you keep your head clean and, and, uh, and get the stress out.

But, you know.

Yeah, it's been really fun.

Both of our muscles are bulging off the screens and for me, you know, I think that's a good thing for both of us.

It's a good, yeah, it's, it's, it's a really good thing.

I mean, so do you have any CEO mentors?

Like, what's your, when you need help, you know, navigating?

Look, I mean, you don't know, it's a small world of people that have these jobs.

Uh and not everybody attains them.

Who do you go to for advice and what have they told you the past year?

You know, I, I'm blessed with a really good board.

Um our chairman, Enrique Lores, uh CEO of HP is a, is a tremendous mentor.

Um And now I go back into, into my history, you know, Brad Smith who was, you know, the CEO of, of Intuit for a long time while I was there.

Uh is someone that, you know, I've picked up the phone and he is, um he is always available to talk to me and it's just incredible and I feel blessed to be able to have a good string of people that I can, I can reach out to whenever and, and you're right.

I mean, these are, these are unique jobs and these are problems that you face that, um, very, very few people have, uh, have faced.

But again, I try to surround myself with the right, right.

Folks who could at least either give me an answer or at least, uh, have some empathy when I, when I call with, uh, with a problem, what's some of the best advice you've gotten, you know, as you've risen the ranks and now that you're here leading paypal, I mean, do you have a couple, I guess things that have really inspired you that you think have helped get you into that seat?

You know, there's, there's a few, um, certainly as, as, uh as CEO, there's, there's one that, that I think about a lot which is, comes back to velocity, uh everyone around you will try to slow you down.

It's sort of, it's sort of natural.

Uh, you know, you get into a place where, you know, teams want to set expectations and by doing that and making sure that they, they set expectations for you.

You know, they're very rarely going to push you really hard to go faster.

You as the CEO have to be the pace setter.

You've got to be the one that's pushing on how fast you're going to deliver and, and the focus that the organization has to be on.

So that's, that's a big one.

Um There's also just a leadership philosophy that I've got, which is really around servant leadership and about empowering um the organization now, in order to do that, they have to have clarity of the strategy.

They have to have an operating system that they know how to operate within.

But once you have those things together, if you built the right, the right team, all of a sudden, you should be able to unleash them and, and look, I don't, I don't, it's, it comes back to the brand conversation.

I don't want decisions that I shouldn't be making flowing up to me.

I need to empower the team.

That's how we'll move fast.

That's how we'll be able to innovate for customers.

Well, we are uh looking forward to following your uh CEO journey doing a lot of things right out of the gate there.

Uh paypal, Co, Alex Chris.

Good to see you.

Hopefully we could talk before your second year anniversary.

I know you're very busy over there, but please giving us, keep giving us some time here at Yahoo Finance.

We'll do it, Brian.

Good to see you.

All right.

That's it for the latest episode of opening bid on the Hunt for the hottest market commentary.

Then join me Yahoo Finance's executive editor, Brian Si, an opening bid, a show with unrivaled insights from top money managers and analysts.

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