PayPal Responds to Visa Threats, Sort of

canstockphoto14540932Last week, Visa’s Chief Executive Charles Scharf went on a bit of a rant describing the complicated relationship between PayPal and payment networks.

At a different conference yesterday, Dan Schulman, PayPal’s chief executive, didn’t seem concerned about the dire warnings coming from Visa:

I know that there has been a long history there [between PayPal and payment networks]. People call it ‘frenemy,’ people call it different things. But from my perspective, we drove tremendous amounts of traffic to those networks. We work with 14 million merchants, most of them small or midsize; without us, they wouldn’t be utilizing cards online. But because of some issue around ACH and etc., there seems to be friction. As of now, I personally have talked to most of the large FIs, and just about all the payment networks, to give an understanding of how we are evolving.

Schulman said the conversations around sharing data have been yielding positive results, and will eventually take away some of the friction, even as PayPal continues to pursue an aggressive growth strategy.

“I am not going to predict where all this will go, but we are very encouraged,” he added.

Last week, Visa’s CEO sent a message to PayPal to stop encouraging its customers to link their PayPal accounts directly to bank accounts, instead of credit/debit cards — or face the consequences. At the Wall Street conference yesterday, Scharf added this to his previous message:

There is nothing new and anything I am going to say here or anything I said last week or the week before that, which is people talk about ‘frenemies.’ There is no such thing in my mind, either one or the other. And I’ve got a lot of respect for the people at PayPal; I’ve got tremendous respect for what they’ve built and the capabilities they have. But, what they do as a business is not good for us and is not good for our clients.



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