PAYPAL

Michael Salmony 0:12

Hello, my name is Michael Salmony and I'd like to welcome you together with Javier and Ralf to another episode of the Payments Trilogue. And today we're really happy to have PayPal with us, one of the champions, of course, in payments, which touches all the topics that we like to talk about on our channel here. It's about regulation and identity and fraud and stable coins and AI and everything.

So I'll shut up to give the colleagues from PayPal a chance to tell us your thoughts. So maybe Mathilde, you could start to tell us a little bit about yourself and what your thoughts are around coming from PayPal.

Mathilde Bonneau 0:56

Thanks, and it's great to be here. It's great to be invited, so thank you for that. So I'm Mathilde. I've been with PayPal for 10 years now, always looking at the policy, the regulatory landscape out of Brussels, focusing on Europe. And since a couple of years, I'm really looking at this from an international perspective as well, which has been a ⁓ great way to compare and

and draw lessons from Europe elsewhere and also take lessons back. So I'll leave it there for now. I know we'll get into a lot of topics as we converse.

Michael Salmony 1:32

Okay, maybe Matti you can continue.

Matti Salakari 1:35

Yes, thanks so much also for having us on the ⁓ podcast. My name is Matti Salakari. I'm head of EU Government Relations and compared to Mathilde, somewhat a newbie in the company with only six years ⁓ on the belt. ⁓ My focus is on EU public policy. I'm based in Brussels, Belgium, and obviously a lot of the things around payments, ⁓ financial crime, digital identity, digital artificial intelligence. These are all issues that keep us up.

Mathilde Bonneau 1:55

you

you

Matti Salakari 2:03

every day, so I'm very happy to converse around this.

Michael Salmony 2:08

Okay, perfect. So ⁓ where should we start? Javier, you're always bursting with things to ask. Why don't we start with you? And you ask PayPal what you always wanted to ask them.

Javier 2:22

Okay, thank you very much. Yeah. And when having PayPal guests, I think one of the interesting angles to what they can tell us is what they think about the hottest topic today in Europe, which is this of sovereignty and not sovereignty, but the lack of sovereignty in payment systems across Europe. You may know, and this is also to introduce the topic, that I am the only one in the three of us that thinks that...

even though there might be issues with sovereignty, it's a theme that has been heavily exaggerated. Nobody has explained where is the harm, where do we have this lack of sovereignty, what's the matter, what can we do about it. So having ⁓ an actor coming from the outside may cast some light on this thorny issue that we are discussing in Europe.

Mathilde Bonneau 2:52

Okay.

Thank

Javier 3:19

What do you feel? What comes to your mind when we talk about sovereignty in payment systems?

Matti Salakari 3:19

Absolutely.

So I will definitely get to that. Maybe I'll start with just a brief introduction on PayPal just to set the scene in terms of who we are as a company and what our mission is. So PayPal is obviously a global payments company and we're supporting our customers with their everyday payments. Payment needs be that online shopping, sending money to friends and family, very sort of, you know, on your day-to-day payment companion in many ways. Our customers use this very much through a simple digital wallet where they can link their local bank accounts or cards.

Mathilde Bonneau 3:29

Okay.

Matti Salakari 3:54

and pay in the local currency and check out seamlessly when it comes to online commerce.

And for businesses, we provide a very seamless payment layer, allowing them to accept any cards, wallets, and PayPal balances from customers all over the world. So, truly a global product offering that we're very proud of. And our mission is actually very simple. It is simply to empower consumers and businesses to join and thrive in the global digital economy.

Mathilde Bonneau 4:18

So

Matti Salakari 4:20

by creating innovative experiences that make moving money, selling and shopping very, simple. And obviously, as we are a global company with that global outlook, with definitely as we focus on a lot of the markets in which we're operating in Europe, you know, represents a major, major market for us. It's definitely something that we're seeing that European sovereignty is

Mathilde Bonneau 4:24

Okay.

Matti Salakari 4:45

clearly top of mind for a lot of Europeans, right? Policymakers, businesses, citizens, etc.

And frankly, quite understandably, if you look at the way in which global relationships are evolving around the world, and certainly even more so over the last couple of years, where we've certainly seen a seismic shift in the global world order, essentially. ⁓ So it's absolutely completely right to have a conversation in Europe around how do you ensure a robust and resilient and competitive EU market in that context,

Mathilde Bonneau 4:55

Okay.

Matti Salakari 5:14

and including, of course, in digital payments.

One of the challenges that we're observing in that debate essentially is that there's many different interpretations of what sovereignty is about, what it should be about, and how you might go about reaching whatever objectives it is that you've set for yourselves. So there is some sort of obviously alignment around, know, sovereignty, looking and focusing on reducing critical dependencies. ⁓ But what we find is that a lot of the conversation actually

Mathilde Bonneau 5:20

Okay.

Matti Salakari 5:47

conflates different things and it's really important I think to be very focused on what is it that we're talking about and what does that actually mean for us and what are we trying to achieve. From our perspective fundamentally, sovereignty is actually about choice and it's about resilience. The European payment market is actually very resilient I think, vesting on infrastructure that is very sovereign and has been built over the years already to meet Europe's needs essentially. ⁓

If you think about that infrastructure, mean, think of SEPA, right? SEPA is a huge European success story. It's massive, it's extremely powerful. And it's frankly something that we don't necessarily celebrate enough, I think, in the European payment context. And this infrastructure enables all payment services to actually leverage that power of that infrastructure and to be able to innovate for European consumers and businesses. And that I think is really, really important. And so what is more is that the infrastructure that we have

Mathilde Bonneau 6:26

So So.

Matti Salakari 6:43

is supported by a very robust and the right type of regulatory framework that lays out the rules of the land, the game, so to speak. And in addition to that, on top of that, you even

have a very established oversight layer in financial services and more generally, but obviously in the payment space, of course, as well, that enforces these rules and regulations. So we actually think of a robust and resilient EU payments market as one where

multiple providers can compete openly on user experiences, fraud protection tools, merchant services, costs, et cetera, et cetera, on top of that shared European infrastructure, building choice for consumers, obviously, capacity and resilience, of course, the market as well. So when you actually look into that ecosystem, and if you look at PayPal and how we operate, we operate in that services layer on top of that underlying infrastructure, right?

Mathilde Bonneau 7:35

Okay.

Matti Salakari 7:41

contributing to it and developing it. And in some ways we would like to

say that it's actually very easy to use PayPal, but it's also very easy not to use PayPal. so much, there's other means of payment that are available to all customers for most situations, right? And so as such, I don't think we would consider PayPal as critical infrastructure in the classical sense of that sovereignty debate, right? So again, it's actually really important when we talk about sovereignty, I think, to be very clear about

Mathilde Bonneau 7:53

you

you

Matti Salakari 8:10

What are the different layers in that ecosystem? What are the actual needs that we need to need addressing and how do you reach those objectives, right? So for us, really the focus should be on building that resilience and including that choice in that ecosystem, not to look for isolation as such, because at the end of the day, Europe is strongest when consumers and merchants have those trusted options, interoperable rails, and really no single point of failure, either commercially or operationally.

Mathilde Bonneau 8:13

Okay.

Matti Salakari 8:41

So that's sort of the angle where we're coming from into this debate more closely.

Michael Salmony 8:45

Can I just push back on that a little bit? I wouldn't go so far as to say that you're one of these evil American giants who are rolling over our fabulous infrastructure, but you do have a quite a dominant market position, right? I mean, I don't think you're just one of the players. I mean, like in Germany, I think, for example, you have about 30 % of all e-commerce is done via PayPal. So you are for me quite a critical player and all power to you. You've done a great job. But I'd like to understand a little bit.

Mathilde Bonneau 8:45

If. ⁓

Okay.

Michael Salmony 9:14

A, why do think that is? Why do Germans love PayPal

so much? And where is the competition that you're saying?

Mathilde Bonneau 9:22

Maybe I can jump in on this one. And I think it really brings home that point about infrastructure versus services that Matti underlined.

What we need for a sovereign Europe, a resilient Europe, is really resilience in the core payment rails. But then you've got that services layer where you enable, so you need enabling framework for that overlay layer for services to be created, to thrive. Now, Matti said we have a fantastic regulatory framework.

⁓ in Europe and I don't think that should be underestimated. ⁓ If you think about ⁓ the way in which the PSD framework has created passporting all these years ago, a single European area for firms ⁓ to provide services across the EU. And I think that's really where perhaps we might see some of the gaps really where

And that regulatory framework has been ⁓ focused on a lot of great things, but perhaps it needs to evolve a bit further in terms of creating that enabling environment for a thriving services layer. You know, what do we need for thriving services? We need incentives for innovation, for investment. We need interoperability, harmonization. We need to focus on the user experience, on customer adoption. We need trust and security. And

⁓ I would argue some of these things have been really well addressed and some of these things perhaps ⁓ require further work. So when I think about a future retail payment strategy or whatever's going to come next down the line from the European Commission, I would tend to think that ⁓ it should be less about the incremental

improvements you can make to the infrastructure and rather think about, know, how do we enable businesses to thrive? How do we enable a new payment service, an innovative overlay service to be created, to set up shop, to provide services across the European Union? And, you know, when we think about PayPal success, we entered the market in 2007. We were able to passport our services across the union in one go.

⁓ And that's really been, that scale has been really important and critical to that success. we just, the foundations are there in Europe. We need to make sure that others can take advantage of that.

Ralf Ohlhausen 12:08

I would like to ask you a bit deeper into the regulation PSD2, PSD3. actually, before diving in, I have one more thing, more like high level topical, I wanted to ask about, well, you changed CEO has been in the headlines last few weeks everywhere. Any any explanation or anything that we can expect from that change?

Matti Salakari 12:33

That's true. ⁓ So Enrique Lórez ⁓ is PayPal's new president and CEO. He joined at the beginning of March in 2026 and he's actually a very seasoned executive. He's been with multiple companies and notably for a long time with HP, ⁓ over three decades in technology and commercial experience that he brings to the company. He's been part of the, he's been chair of the PayPal Inc board. So he's had direct visibility into the business over the last couple of years.

And so he's not considered necessarily as an outsider to the business. He's certainly been brought in sort of from within in that sense. ⁓ I think one of the reasons and one of the missions that he has set out for him and self and the company has really been to double down on what the customers really expect from us. Seamless and secure payment solutions executed at scale, right? And across the markets in which we operate and really to sort of accelerate the delivery of these new innovations that we hope will hopefully.

in the future also shape digital events and commerce. ⁓ We're not really necessarily hearing or seeing any sort of major strategic shifts in any shape or form. I think the message that we've given to shareholders and that what they've also expected from PayPal has really been to double down on the things that we do best, right? So it's supporting commerce, supporting SMB, supporting our customers in what they need. And I think it's more a question of actually sort of...

Mathilde Bonneau 13:33

Okay. Okay.

Matti Salakari 13:57

reinforcing that direction as opposed to shifting. ⁓ So that's

sort of, is obviously still relatively fresh in terms of, know, his tenure with the company. ⁓ But certainly that's the expectation ⁓ right now.

Ralf Ohlhausen 14:13

Okay, interesting. Thanks. And okay, now back to regulation and more detail. So well, we have ⁓ PSD3 or more importantly, PSR coming up. ⁓

Mathilde Bonneau 14:18

Okay. Okay.

Matti Salakari 14:20

You

Ralf Ohlhausen 14:29

You will have seen that the trilogue has concluded and so you'll have some insights, I guess, about what

Mathilde Bonneau 14:36

you

Ralf Ohlhausen 14:36

to expect. ⁓ But I don't think we have to speculate about what exactly but what are you hoping for? So what do you think we should get? So what is it that you as a company struggled with and you would like to see improvements on the regulatory side?

Mathilde Bonneau 14:56

Yeah, so I think first ⁓ to start and just to link back to the previous points, a lot of the things that I've talked about in terms of we need trust, we need security, we need customer adoption, choice. A lot of these dynamics are really reflected in that framework. ⁓ And just to take a massive step back, PSD1, PSD2, they've ⁓ really strengthened the payments landscape in Europe.

got a single rule book, we've got, you know, ⁓ that made domestic and cross border payments more efficient, more secure. ⁓ And so there's been a lot of good developments. think, you know, with PSD3 and PSR, it's been a long discussion. ⁓ Indeed, the the trilogues have ended. And ⁓ before going into what I would hope for some of the future improvements, I do want to highlight one of the

lost opportunities that we think has not been taken up in this round, which is a pity because it's been something that PSD2 did very well and that's really to incorporate new entrants into the framework, ⁓ acknowledging the innovation that's been happening in payment services and we've seen that with Open Banking and PSD2 and then in PSD3 PSR, know, there's just been

There was an opportunity to bring digital wallets more clearly into the perimeter to make sure that what people are actually using as payment means is also reflected in the regulatory framework. And that's been missed. I know there's a review clause. I know we'll discuss it down the line again. But if you're really serious about competition and innovation, we should have been doing that now, looking at what is the payment-related activity that's being performed? What is the customer outcome? How are they using it?

based on that, bring the relevant entities ⁓ and solutions into the framework in a way that's proportionate geared towards the activity itself. But I think we've really lost that opportunity now to have a more cohesive, consistent approach to the level playing field in the wallet space. Now, you asked, what's been one of our, what are we looking forward to? What's been one of the pain points?

I don't think there'll be any surprise to say that strong customer authentication has been a very big topic for PayPal. We are very conscious about making sure that the customer experience is seamless and secure. Trust is the foundation of the brand. That's the whole reason PayPal was founded was to be that trusted third party to create ⁓ that space for cross-border payments.

Javier 17:23

Mm-hmm.

Mathilde Bonneau 17:45

We're very focused on that. And SCA and the PSD2 has delivered clear results. We all agree and even ⁓ that unauthorized fraud has dropped significantly following its introduction. We've seen that drop. Everybody has seen that drop. The data is very clear. It's a genuine success. But I think we have to be careful not to be complacent about it. Thoughts have adapted to that.

Over the years, we've seen two very clear trends. We've seen fraudsters directly exploit the weaknesses of existing SCA methods, targeting factors specifically. So through SIM swapping, ⁓ phishing, malware, credential theft, mean, the number of data breaches out there with passwords just floating on the internet is honestly ridiculous. ⁓ And so we see so criminals really targeting those factors.

getting a hold of them and then doing SCA themselves and you've got unauthorised fraud. Secondly, and increasingly even more concerning is that shift towards the customer themselves. Criminals are looking for the weakest point in that authentication chain and with those increased controls for account access and payment instrument access. ⁓

They're really going after individuals themselves using very sophisticated social engineering to persuade customers in good faith to make transactions to someone they reasonably believe to be a legitimate payer. So that rise in authorized fraud is also quite concerning. ⁓ I'll park that for maybe ⁓ a different point later on in the discussion, but just going back on SCA.

I think what that evolving landscape shows is that we can't stop as just the framework we have today. We have to modernize it, we have to evolve it so that what are essentially very fairly rigid framework needs to adapt, to make payment providers need to be able to deploy new ways of doing SCA, of authenticating that are not set in the rigid rule.

One of our hopes is that this conversation carries on in level two, that there is a clear recognition in level two that we need to have ⁓ the ability to deploy solutions that will ⁓ improve security today, that will keep people safe, and that is really focused on outcomes. I think one of the...

The biggest discussions so far on SCA has been what factors are allowed to authenticate, whether it's two from different categories, from the same category, whether it's two or more, et cetera. to an extent, that's a of a false debate. It shouldn't be about the individual factors themselves, but the assurance level of the entire solution.

if I'm deploying two possession factors that deliver a better outcome from a security perspective and a convenience perspective than two ⁓ factors that are different, then why should I not be able to do that? And so it should be about the outcome that you're delivering ⁓ in close collaboration with your supervisors, et cetera. like it shouldn't, the design of that authentication solution should be much more ⁓

in the hands of the provider themselves.

Ralf Ohlhausen 21:23

Yeah, well, if I could just say that that was exactly one of the points one of the points I've made also many times and but it doesn't look like it's coming although

Michael Salmony 21:23

Now, let's see.

Ralf Ohlhausen 21:34

If my understanding is correct, we'll probably see ⁓ that we will be allowed to use biometric factors only. But otherwise, they still have to continue coming from two from different categories, which I also fully agree. I don't think really helps just generally and well, but sorry, I think Michael wants to go next.

Michael Salmony 21:56

No, no, I mean, we've discussed many times also on this channel

that we, think we all agree that the regulation should be outcome based and not try to, that Brussels security architect of the financial industry. That's not going to go well, right? Because the industry just knows better how to do things. And PayPal has always been for me a complete champion in how to manage frauds and authentication. I've learned so much from them. And I know that you have an enormous team. Many people think payment.

Ralf Ohlhausen 22:05

Yeah.

Javier 22:17

you ⁓

Michael Salmony 22:23

PayPal is a big payments company for me. They are largely a fraud and fraud defense and authentication company. ⁓ But I just want to go to another topic. I maybe didn't get much of an answer on my last question, but I'm going to try another one. Matti rightly said that there's a lot of competition coming up. I think that's a very valid point. Just be interested to hear your thoughts. There's Wero coming up and stable coins and digital euro.

How do you see that? Are they competitors or will you just absorb them as yet another way of paying in your wallet?

Matti Salakari 23:00

I think one of the strengths of the European payment market is the fact that there is a lot of that competition. So competition, what it means, means choice for consumers. means in a way a raise to the consumer. And that means that companies are innovating and bringing out solutions, products that meet the customer's needs. And actually comparing to thinking from a global perspective, Europe is particularly advanced in payment methods. The amount of availability is something to be in a way celebrated in that sense.

So competition is almost a given on the market. And it is something that we always see as a positive because of the outcomes that it can give. So if you think about Wero specifically, I mean, it has been a really great success story, you know, marked by a strong communications campaign, of course, and a rapid uptake in a lot of the marketing which is currently available. And we've been actually very supportive of it. mean, European account-to-account solutions promote digital payments again, across the European markets.

And we see this as completely, totally complimentary to the existing payment mix already. The landscape is very dynamic, right? And there's a lot of co-opetition. So of course, at the end of the day, we'd also love to be able to cooperate with, know, Wero with any of the local payment methods, essentially, as we do already, and be able to support them on the PayPal wallet to help also drive distribution, user adoption, and even further.

So if you look at things like PayPal, Wero, EuroPA, most, ⁓ if not all of these initiatives, there's actually this very shared ambition at the end of the day, right? And this is about enabling customers to make use of their payment method of choice wherever they are,

Mathilde Bonneau 24:31

Okay.

Matti Salakari 24:39

right? ⁓ And this is actually one of the reasons that we, what we've done is that we've also launched something we call PayPal World, which has been launched relatively recently and that's meeting that objective specifically.

Ralf Ohlhausen 24:54

Can you explain a bit because yeah, I read about that too. So it connects UPI, for example, and it almost provides an interoperability that we've discussed many times here, where you are sort of stepping up to another higher level coordination here. Is that right?

Mathilde Bonneau 25:12

I think you could see it as enabling interoperability between wallets globally. So it's about recognizing that there are some very successful domestic payment solutions, domestic wallets.

And they're successful because they met a specific need in that market. And there's no reason to go and change that. Customers are using that solution. They're familiar with it. And so the idea is to say, what is stopping them from using their preferred solution abroad? With PayPal more generally, that's how we've approached online payments.

So, you know, with PayPal World is really about, how do we bring that to the tourists that's traveling physically, if you know, from India to Germany. ⁓ And so it's that's the vision really. It's it's, you know, helping and enabling ⁓ domestic wallets to be used across the world. It's a massive project. You know, the others are doing it as well. It's incremental. ⁓ We've we're starting slow with a specific number of partners. We started with, you know,

PayPal and Venmo, easiest ⁓ lift in a way, given that Venmo is also a PayPal property. ⁓ But yes, we're very, very happy to be working with UPI and India on this and we'll keep you posted. You'll see developments as they go ahead, but that's the vision, that's the shared ambition that we would have. And it's really about ⁓ going down the line in the future is...

Who do we, would we be able to partner with wherewith EuroPA with others to allow that cross border global reach as well? That's certainly something ⁓ very far down the line, but the ambition is there.

Javier 27:06

Let me ⁓ just express that commenting about EuroPA and EPI Wero, I think they should be envious about you, PayPal. We have many times discussed in this three-party dialogue that we seem to lack in Europe global champions. We fall short of having real global players and particularly in the payments industry, I would say,

that we would say that we don't have a PayPal. So my question would be, ⁓ or why, which were the factors and circumstances that made not only PayPal to be viable, but to be a global success? And without revealing any ⁓ industrial secret, but being very candid, how can you advise the EuroPAs or the Weros in Europe to...

if not to become global, to become more global or to have more access and to grow ⁓ more robustly than we are able to produce here in Europe. Because we tend also to say that we have built excellent rails, but we don't have high-speed trains like PayPal. That's how we express our failure in having those

Mathilde Bonneau 28:09

you

Okay.

Javier 28:31

global champions. What would be your advice if you can tell us to these European companies to become more global?

Mathilde Bonneau 28:41

It's a very good question. Interesting. I'll, you know, of the cuff, would say, and starting with, you know, what is it that made PayPal successful? I think it's because we were meeting a gap and need at the time. So if you take, you know, take ourselves 25 years back, the gap then was, you know, how do we, how are customers and merchants going to trust each other?

across borders online on this new thing called the internet that was fairly new and fledging and whilst making sure that you're paying to someone that is going to send you the good. So that's a gap we saw, we met and grew from that. I think 25 years down now, there are fewer and fewer gaps. We have great rails, we have in Europe especially good payment systems that make

the gap's less obvious. So like my advice without necessarily being very concrete is, you know, find that gap. What is it that actually customers will want to do and to use and why they will switch to or use your service over another? ⁓ So it's, if you look at Europe, there's certainly, ⁓ you know, I would argue that

where on your PA are already on the right track. So I think it's finding that added value, why customers will want to use and choose you. ⁓ And then it takes time, it takes money, it takes investments to build the systems that then you would scale across the world. And I think it's also about being ⁓ agile. It's about...

what is a gap in one country may not necessarily be the same in another country and it's adapting to that and understanding where you fit in there. So yeah, not very concrete, but those would be my immediate thoughts.

Javier 30:43

No, no.

Ralf Ohlhausen 30:44

Well, have if you don't mind, I have a very concrete question there as a follow up because you have been ⁓ first and trying and I think more like probably more for more than a decade now to crack the nut of how of using account to account or wallets at POS physical point of sale.

Mathilde Bonneau 31:10

Mm-hmm.

Ralf Ohlhausen 31:11

This is this is what everyone in Europe is now trying to will have all our successes in e commerce, etc. It's all online, it's easier, but in store retail on a terminal. It looks to me at least that you have tried hard and not succeeded yet. And now what are the lessons learned or the mistakes not to make ⁓ out of that?

Matti Salakari 31:39

Absolutely. Any conversation around new developments and new digital payments often include that offline discussion. Certainly in the digital euro conversation, there's a lot of discussion about how do do that offline. Similarly, for any other developments around in-store payments and digital commerce, commerce in-store is of course always top of mind.

And one of the trends that we've always observed from our consumer preferences over the years has actually been this sort of a greater desire towards more omnichannel experiences, right? So consumers are looking for and expect from their payment methods to go with them wherever they go, be that online or offline or on mobile or, you know, indeed in the store and physical point of sale. We started to look at point of sale options, obviously, you many years ago and

Mathilde Bonneau 32:16

Okay.

Matti Salakari 32:30

And at the time, QR code technology was picking up in many parts of the world very successfully. And while it was used to some extent in Europe as well, it was not really picking up, honestly. I mean, and I totally get that actually. mean, if you look from personal sort of experiences, I

Mathilde Bonneau 32:31

Okay.

Matti Salakari 32:46

can think of maybe one or two examples of a time where I may have used the QR code to actually pay in store. It's a technology that is a helpful backup tool, I find, but it's not, you know, it's not really designed to be or...

go to go to optionality, right? And so with, with, especially with COVID, right? And as life became even more digital, we, we did roll out QR based, QR code based point of sale solutions across Europe. And our experience there with was that ⁓ merchants actually found it relatively difficult to integrate multiple QR solutions into their existing systems to begin with. But also, like I said, you know, consumer behavior did not really seem to move towards favoring QR codes.

Javier 33:11

you

Matti Salakari 33:27

But instead, think what's been a really key development in that has actually been the ⁓ ability for companies to make use of NFC capabilities in mobile hardware. And this has been a really a direct result of the European Commission's decisive antitrust action, opening up NFC capabilities from hardware providers. And so making use of that ability, last year we launched an NFC-based ⁓ solution at the point of sale in Germany.

And we've actually seen that consumers are indeed embracing this as part of that endeavor towards omnichannel experiences, right? Since the introduction around, I think about 7.6 million users of the PayPal app in Germany have registered for this service, representing about 22 % of the user base. So it's actually quite a strong solution, And importantly for us, this is really represents something that's really a European success in a way. We've been able to

The competition has allowed us to innovate in and for Europe. Germany is the first market that we've actually globally where we've been able to launch such a product. And that's quite remarkable. It shows the potential that the European ecosystem can actually provide for global company like ours. And when done right, definitely there's room for innovation.

Michael Salmony 34:45

I really have to ask again, what is your secret source in Germany? seems ⁓ you've got about a third of the market. We seem to have lost Matti, so this is going to you. No, he's back again.

Mathilde Bonneau 34:46

you

⁓ No, but I mean,

can say it's, know, payments are incredibly cultural. And the way in which people pay is will vary across markets. And I think, you know, the strength of the PayPal wallet from the beginning has been that we don't just

work with networks and integrate cards within the wallet, but we also integrate banks, right? Bank accounts. And so the ability for customers to pay with bank through PayPal, I think has been incredibly powerful. And indeed in Germany, where culturally there's a preference for bank payments.

Michael Salmony 35:39

Okay, that's a good explanation. mean, is a... Sorry, Javier, just one quick follow up on that because you were also talking about sort of solving the gaps and solving problems for customers. I think that's a very valid point. And there's a sort of cliche in the markets that PayPal is super good at consumer facing stuff, right? Because the consumers love it. There's lots of redress systems. If there's a conflict, you always decide in favor of the consumer.

Javier 35:41

So.

Mathilde Bonneau 35:51

Mm-hmm.

Michael Salmony 36:05

But there's also a sort of feeling that maybe the merchants don't love you quite as much. They have to integrate you because otherwise they will lose some acceptance, but you're quite expensive and you always ⁓ decide in favor of the consumer. Can you set that right? Or is there anything you want to comment on that?

Mathilde Bonneau 36:23

I I think it's all about the value proposition that we provide. we're no longer the only ones, but for a long time, we enabled bank at the online POS. We integrate local payment methods. Ultimately, customers want to use their local payment methods to the extent possible.

And so merchants, they want to reach, have that global reach, meet customers across the world. It's about making sure that they offer that option to their customers. ⁓ On the gap question, I actually had a thought when you were discussing Wero and everything else. I think maybe the next gap is all about ubiquity, is how do you solve precisely that?

How do you make sure that, ⁓ how do you meet the customers where they are in terms of them wanting to use their preferred payment solution, whether that's online, whether that's in store, whether that's at the railway station. So the next frontier might be ubiquity. And I don't know if anyone has actually solved that yet.

Michael Salmony 37:37

Javier, sorry, I interrupted.

Javier 37:39

No,

it was just a short comment to take sides with our guests. think when analyzing a success, there is the other side, which is if there is someone being successful, others have failed. So we have also to focus on the reasons of failure. And this not only applies to Germany, but to many other markets. it's of course you have to analyze why or what were the success factors, but also why others failed. And this, think in Europe, we are not very much used.

to do that exercise, to analyze ourselves from that critical point of view. And we should start not looking into our belly button, but really to our less fancy features of our personality.

Michael Salmony 38:24

Fantastic. think we're gradually reaching the end of time. Is anybody still got any burning questions to pose to our lovely experts here? do you have any other agenda items you would like to communicate to the wider world? If not, I would say thank you very much. Yes, ⁓ Mathilde, please.

Mathilde Bonneau 38:45

I mean, I

didn't mean to interrupt and if we're at time, we're at time. But I mentioned authorized payment fraud, think earlier. And I I just did want to make the point that if I look to future frameworks and future endeavors, that's really an area where we need a lot of focus.

But it's not just about payments. So we do kind of get out a little bit more from the topics of the podcast today. But I really have to acknowledge that there's ⁓ traditional ways to mitigate and to prevent fraud, unauthorized fraud don't work in a world where ⁓ of authorized payments. It's very simple. Traditional methods to prevent fraud focus on who is paying.

Are you who you say you are? And are you legitimately making that payment? ⁓ In this new world of scams, of authorized payments, it's about who's being paid. And that is something that as a payments ⁓ provider, we can't do on our own. And I think it's really important. And we've seen ⁓ beginnings of that discussion under PSD3/PSR. if there's...

One thing I would challenge future policymakers to look at is really to think about this from a cross-sectoral point of view, from a whole of government point of view. So it's not just about the public, the private sector across payments, across where scams originate, whether that's telcos or platform social media, but also from a public sector side, law enforcement, how do you investigate those crime rings? How do you disrupt those operations?

And it's really, ⁓ it's an effort across public and private. It's an international effort and it's an effort across sectors. And that is something which is really the next frontier in my mind, when you think about, you know, protecting customers, keeping them safe online and really keeping fraud and scams low.

Javier 40:54

Mm-hmm.

Michael Salmony 40:55

Okay, thank you very much. Until that again shows your incredible competence in the fraud and ⁓ anti-corruption area. I've always been super impressed with that, with PayPal. So thanks very much for answering all our probing questions and standing up ⁓ under scrutiny. That's really appreciated. We can see your skilled negotiators in Brussels. One can hear how you answer questions so skillfully.

So thank you very much. Thank you to everybody here and thank you to all those watching and look forward to seeing you next time.

Javier 41:29

Thank you.

Mathilde Bonneau 41:30

Thank you for having us. It was great.

Matti salakari 41:30

Thank so much for having

us.