At the Front Door of Commerce: Peggy Alford’s Commerce Summit Keynote
In our 9th annual Commerce Summit, we’re discussing the future of credit and credit infrastructure across a three-part virtual series. From BNPL to changing tech stacks, we’re in conversation with some of the most influential leaders shaping tomorrow’s credit. Peggy Alford (EVP @ PayPal) closed the series, speaking with us about “super app” ambitions, crypto, and consumer credit trends.
Informed by experiences as CFO at eBay and the Chan Zuckerberg Initiative, sitting on the board at Facebook/Meta, and today as EVP at PayPal, Peggy Alford has a bird’s eye view of the development in FinTech and the broader commerce ecosystem. To conclude the #2021CommerceSummit, Peggy reflected on some of today’s biggest market movements with Karen Webster, CEO @ PYMNTS.com.
Key Takeaways
- Today’s BNPL craze is less about technology and more about enabling consumers to transact in a way that accommodates their unique circumstances and preferences.
- PayPal is connecting commerce across shopping, payment, and rewards by building an end-to-end commerce experience that enables consumers to transact and manage their shopping in one place.
- To date, cryptocurrency has primarily enabled consumers to buy-hold-sell volatile assets. Tomorrow’s capability will create more transaction usability for both consumers and merchants.
- The crypto craze is a symptom of the world’s desire for currency digitization, not the end of fiat currency. This indicates a broader goal for PayPal to partner with governments to enable sovereign-backed digital currencies and drive further adoption.
- Democratizing access to crypto is critical as we cross the early adopter phase. Now moving to the general population, tools like fractional ownership, reduced complexity, and easy access must be in place to counteract the inherent volatility and hurdles surrounding crypto today.
Consumers Demand Flexibility, Credit Rises To Meet the Challenge
With a professional life spanning across finance, HR, and sales teams, Peggy’s broad experience enables her to deeply empathize with customers and understand all the driving factors in value-creating technology.
This lens gives Peggy a particularly insightful POV on today’s biggest FinTech trends, notably, Buy Now Pay Later (BNPL). In Peggy’s opinion, this trend is more indicative of the increasing desire for flexibility and predictability from consumers, rather than the stickiness of the new technology. She reminded us that the BNPL concept has been around for a long time. In fact, eBay/PayPal was early to the space having acquired BillMeLater (now PayPal Credit) in 2008.
“We think the next category of BNPL that will take hold is what we call ‘delayed consumption categories.’ Think travel, experiences, concerts — these categories might require a larger upfront payment but do not occur until the BNPL plan is paid off later down the line.”
Peggy sees this renewed interest in BNPL as a representation of the increased consumer desire for predictability and ease of purchase for those with less upfront liquidity. Consequently, there are more products than just BNPL that can cater to the appetite for flexibility.
“It’s this broader concept of wanting more flexibility to pay depending on what’s going on in [a consumer’s] life or what it is [a consumer] buying.”
Whether it is BNPL or embedding Venmo at the POS, Peggy zeroed in on the idea that providing consumers more frictionless and flexible opportunities to transact is a central focus to PayPal’s vision for a more successfully, accessible, and modern platform.
Building the Connected Economy
Perhaps just as buzzy as BNPL, we talked to Peggy about PayPal’s effort to lead the charge in the “connected economy.” To us, this reinforced our broader view on the potential emergence of super apps in the United States — a topic that we’ve written about and covered in our last two Summit keynotes.
In the way BNPL has enabled consumers to adapt payment behavior to best suit them, Peggy believes that a unified platform that connects every aspect of the commerce journey can erase many of today’s biggest shopping pain points. Peggy stressed that the fragmentation of a consumer’s commerce journey is full of friction today: deals aren’t easily aggregated, predictive advertising feels intrusive, and loyalty rewards are fragmented.
The newest version of the PayPal app steps in this direction: empowering consumers to shop, transact, chat, and more all in one secure platform. Effectively, this platform would become the digital front door to the broader suite of services within the PayPal network.
Karen Webster pressed on the subject of security in a unified offering like this, asking how a PayPal “super app” could build consumer confidence in the security of their data despite an increasingly skeptical climate.
“Security has been in the DNA of PayPal from the start,” Peggy said.
Building trust for a “digital front door” to the PayPal network has been integral in the development of an offering that is largely new to the American consumer. She shared her confidence in the legacy of trust among merchants and consumers Paypal has established and continues to build.
Peggy acknowledged the fine line between the desire to have relevant suggestions for consumers while still managing personal data with responsibility. While navigating the balance between trust and data usage she’s optimistic about creating new predictive offerings that can streamline checkout and delight consumers.
Navigating the Crypto Revolution
Shifting to the new frontier mentioned in PayPal’s latest earnings call, Karen asked the EVP about how PayPal is thinking about the cryptocurrency revolution. While much ink has been spilled about the future of digital assets, blockchain tech, and cryptocurrency, Karen pointed out that 60% of American consumers are not invested in any crypto.
PayPal takes its role in making crypto accessible and doing so with educational effort for all interested consumers. Considering Venmo’s continued expansion into cryptocurrency, Peggy spoke to the need for responsibility as an enabler in the space:
“We want to democratize the access to being able to invest in crypto by enabling people to buy [fractional] value of coins… It is really important that along with that, we provide a lot of education in both Venmo and PayPal. It’s something that we are taking very seriously because we want [investing in crypto] to be something people are doing aligned with their risk appetite and with what they can afford.”
Peggy also shared her personal POV on the recent waves of crypto evolution. While past infrastructure created buy-hold-trade capabilities across a variety of currencies, Peggy looks forward to the next evolution of crypto development:
“What I’m actually really excited about is adding utility to crypto by enabling consumers to use it to purchase. As well as enabling merchants to offer it as a funding source.”
PayPal’s most exciting development in the space is enabling merchants to seamlessly accept crypto and have it be automatically received as fiat money as a part of the network. Building for frictionless transactions is at the core of PayPal’s mission, and crypto is the latest vessel that the company will move to accommodate.
“We view this as an enabler, not something that’s going to take the place of central banks around the world,” said Peggy.
Peggy reiterated that the “cryptocurrency phenomenon” is constantly changing. Today, PayPal believes it is a symptom of the larger digitization of currency worldwide. With this in mind, the long-term goal for PayPal is to create long-lasting government partnerships, ideally with Central Banks Digital Currencies (CBDCs), democratizing safe and easy payments for people worldwide.
