Georgetown University’s Institute of International Economic Law (IIEL) has released a long interview with PayPal CEO Daniel Schulman. The talk covered the future of digital commerce, fintech and financial inclusion, and it took place on Capitol Hill.
Chris Brummer, the faculty director of IIEL, led the conversation before a live audience. They discussed new business and regulatory trends across several sectors of the economy.
Retail after the smartphone
One of the biggest themes was how deeply mobile technology is changing retail. Schulman expects online shoppers to keep disrupting malls and shopping centers on a massive scale. In his view, retail will come to look like Asia does today. There, shoppers skip carts and checkout lines. Instead, they tag items with their phones, and the goods reach their homes within half an hour. Stores, he said, will gradually turn into small logistics hubs.
Brummer later wrote on his blog, hedged positions, that this forecast deserves careful thought. He argued that Schulman leads the world’s top online payments company, so he sees in real time how consumers and businesses interact. Because of that, Brummer added, no one is better placed to spot the trends about to upend retail.
Schulman also predicted that the line between online and offline shopping will blur, since algorithms will use data to tailor products and services. That could bring consumers many useful new services. However, competition built on data will also raise the bar for young retail companies to enter, even as powerful tech firms disrupt older retailers. As a result, much will depend on whether early disrupters share the data from their operations with newer companies and entrepreneurs, and how.
Inclusion and regulation
The two also discussed how fintech can widen financial inclusion and help end banking deserts. They talked about the need for better coordinated public-private partnerships, too. Although PayPal is well known and has 210 million users, it holds roughly 1% of a $100 trillion industry. Meanwhile, nearly 2 billion people worldwide still live outside the financial mainstream.
Schulman praised regulators for trying to understand new technologies through regulatory sandboxes, which are becoming more popular. He concluded that technology’s growing role in society must be guided, and judged, by the old moral goal of doing good while doing well.
The interview is the latest addition to IIEL’s expanding fintech program. The institute is a leading global forum for interdisciplinary academic and policy research. It held its first annual Fintech Week, where senior government, legal and finance experts met leading technologists, and it has hosted other forums with entrepreneurs and policymakers. Most recently, the head of the CFTC’s financial innovation program wrote an IIEL Issue Brief on the agency’s new fintech agenda.
Professor Brummer, author of Minilateralism, leads the institute. He recently finished a three-year term on the National Adjudicatory Council of FINRA, the securities regulator. President Obama also nominated him twice to serve as a Commissioner of the Commodity Futures Trading Commission.
