December 12, 2019 – “Paypal is a platform that enables commerce for both consumers and buyers globally. Paypal essentially helps both consumers and businesses connect to each other,” says Nagesh Devata, Paypal’s director and general manager for Southeast Asia’s cross border markets.
According to Devata, the platform provides a gateway for Filipino entrepreneurs and freelancers to participate in the global market through its cross border payment platform.
Paypal vs Blockchain
Devata believes that by having a global network that understands local conditions, Paypal has an unfair advantage over blockchain companies that offer borderless transactions.
“Blockchain is relevant and it is something that PayPal is tracking and monitoring. We are always looking at what the trends are and what can be the future developments. From PayPal’s perspective, it is something we are aware of. We are actively monitoring it. We are actively tracking it. We are seeing where it may be in the future,”
What’s noteworthy about this is the fact that Paypal was one of the major companies to join Libra Association—an association of companies and institutions established to oversee the Libra currency—among other payments titans like Visa, Mastercard, and Stripe.
Libra is a permissioned blockchain stablecoin proposed by Social Media giant, Facebook.
Paypal COO Bill Ready talked about their decision to join the Libra Association, as reported in June 2019. He stated that one of the core missions of Paypal is to serve the underserved and unbanked worldwide, and partner up with global infrastructure providers to make that possible.
Ready believed that serving the underserved and unbanked is beyond any one player to be able to do alone, hence, Paypal joined the association in order to make a difference in cooperation with multiple big-time players.
Ironically, Paypal was also the first company to pull out of the Libra Association, amid the Libra project’s scrutiny from several governments and regulators. Furthermore, the payments network did not give a reason for leaving.
As it said, “PayPal has made the decision to forgo further participation in the Libra association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratise access to financial services for underserved populations.”
This statement would make one assume that Paypal no longer believed that blockchain is the optimal solution for banking the unbanked, at least for today, and that their advantage of having an established global network, as well as knowledge of local conditions, trumps the benefits of using blockchain technology.
Another possibility would be that Paypal is simply taking a more conservative path by distancing itself from Libra, in order to avoid the regulatory scrutiny that comes with being part of association.
If this is the case, then it could mean that once the dust settles, Paypal might rejoin Libra. As Devata says, they are actively keeping track of blockchain technology.
This article is published on BitPinas: Paypal Keeps A Close Eye on Blockchain Despite Pulling Out from Libra