We felt it was not enough to condemn racism, that we had to be really anti-racist, which means that we needed to think about how do we become part of the fight for racial equality? How do we do the work, not just in the moment, but over the long run?
President and CEO, PayPal
These are tough economic times overall for American businesses, but PayPal has continued to thrive as people carry out more and more financial transactions online.
The company is not satisfied with more narrow definitions of success, however.
The pandemic and social unrest have only intensified PayPal’s commitment to reach out to minority-owned and underserved businesses, which are often left on the economic fringe, even in the best of times.
Dan Schulman, president and CEO of PayPal, said his company is acutely aware of the challenges linked to the racial injustice many Americans have been protesting and addressing in recent months.
“We felt it was not enough to condemn racism, that we had to be really anti-racist, which means that we needed to think about how do we become part of the fight for racial equality?” Schulman says. “How do we do the work, not just in the moment, but over the long run?”
Schulman and his employees have been doing a lot of work to expand financial horizons for many minority-owned small businesses.
“This isn’t just a moment, but a movement,” he says, referring to the social whirlwind underway in the U.S.
Addressing the racial wealth gap
PayPal has been pressing ahead with a massive financial commitment — $530 million to help black and minority-owned businesses. That includes $500 million designed to invest directly in black-owned companies and start-ups.
“PayPal has a long history of embracing diversity and inclusion as…our core value as a company,” Schulman says.
This is a time to double down on that effort. He says his company has done “a lot of listening,” talking to black leaders within PayPal and across the country.
He adds that it’s important “to understand how a company like PayPal, (which) has values that match up with social justice, could really make an impact.”
“And so we made a large commitment of $530 million, to support and really try to focus on making progress on the racial wealth gap,” he says. “Because that’s something distinctly that PayPal has some expertise in.”
The company has been busy working with minority-owned businesses, helping them get a financial leg up during difficult times.
“Twice as many black-owned businesses were impacted by COVID-19 and the economic crisis associated with that, than white-owned businesses,” Schulman notes.
For many of those black-owned businesses, it’s nearly impossible for them to get loans. But PayPal is doing a lot to help them..
After announcing the major financial initiative, Schulman says PayPal was inundated with applications. And that was just as he hoped.
He says PayPal received more than 55,000 applications in just two days for $10 million in available grants.
“There’s obviously so much need for this,” he says. ”And then we put $5 million in non-profits toward helping them on the ground.”
Using technology to help the underserved save money
Schulman points out that in the financial community, “the less money you have, the more it costs you to actually do transactions.”
Many of those facing financial challenges are people of color. And the economic strain of the pandemic makes it even more crucial for people to save all the money they can.
Schulman says “using technology can help these underserved communities do things more efficiently” and save them a lot of money.
He notes estimates indicate more than $160 billion is spent annually on unnecessary fees or higher interest rates.
“And if we can save just 10 percent of those fees today, that could be tens of billions of dollars returned to those who most need that money,” he says. “I think that our everyday products and services can be very helpful…in serving those who must need it, who most need a voice. “
He says PayPal is “laser-focused on that as a company.”
PayPal looks within to encourage diversity
“The more diverse your company is, the better you perform in the market,” Schulman says.
PayPal has dedicated $15 million toward making its internal diversity and inclusion programs even stronger. The programs seek to recruit and advance the careers of black and minority employees.
“We’re already 57 percent diverse inside PayPal,” he says. “Our board is 50 percent diverse, but you’re never done in terms of thinking about how you can be more inclusive as a company.”
He says the diversity within the company ties directly into what it’s trying to do in the marketplace.
“The mission of PayPal is to figure out how no individual or company is left behind by this move into the digital era,” he says. “Technology can help those who are underserved to really move into the era of digital retail, digital payments.”
“It is also a way to address the historic inequalities for lower income and underserved communities,” he says.
Making a difference
Schulman is proud of the wide range of efforts and financial resources PayPal is utilizing to help African-Americans and other minorities. The company never sits still, continually looking for ways to reach out.
Shulman says he’s both “realistic” and “optimistic” about what’s ahead. But he continues to believe the technology his company utilizes is going to help level the playing field.
PayPal has found that when it’s able to give working capital to small businesses, on average sales go up 22 percent. That can have a huge impact for minority-owned businesses trying to get a foothold in the economy.
Schulman said he knows it’s “going to be a fight and mission that goes on for years and years and years.”
But he’s glad PayPal has accepted the challenge.
“What drives me, what drives everyone at PayPal, is that we can make a difference,” he says.
