Millennials frequently get a bad rap for being spendthrifts, but PayPal CEO Dan Schulman holds this generation in a more positive light.
“The millennial generation went through the Great Recession, and I think it greatly influenced the way that they think about money,” Schulman explained to Yahoo Finance on Thursday at its All Markets Summit in New York City. “They saw their parents struggling. If it wasn’t their parents that were struggling, it was their neighbors or their friends’ parents. I think it made a profound impact on the millennial generation. They have a strong desire to have control of their money, to save more than you might imagine. And so there’s a real sense of responsibility around managing and moving money.”
Schulman, who joined the board of Oath’s parent company Verizon ( VZ ) in early September, would know. One of PayPal’s ( PYPL ) properties is Venmo, the payments app that PayPal markets towards millennials, which processed $14 billion during the second quarter — up 78% year-over-year.
The 60-year-old executive views Venmo as the Instagram of PayPal. (Facebook owns the photo-sharing site Instagram, which is known for attracting millennials.)
“The way that I think about PayPal and Venmo, probably the best metaphor for that would be sort of Facebook and Instagram,” says Schulman, who adds that Venmo plans on eventually making money by charging merchants who use its “Pay with Venmo” button. “You know, Facebook and Instagram use the back-office platform. They are integrated into a tech stack, just like Venmo is integrated into our risk platforms and in our tech stack as well. But the value proposition is different. And [with Venmo] it is: a lot of the PayPal customer base would not be comfortable sharing their purchases, what they’ve done. But the Venmo base not only is comfortable doing that, but proactively wants to go do that.”
Those tech-savvy, social-happy millennials
Schulman also reaffirms something already well-known about many millennials: They are extremely tech-savvy, tethered to devices like their phones, as well as social media, including Instagram. That certainly helps explain Venmo’s success.
Speaking to that, Schulman says 94% of all Venmo payments are tagged with some sort of comment or emoji and broadcast in the Newsfeed. Meanwhile, Venmo users, which eMarketer expects will number 22.9 million by year’s end, crack open the Venmo app four or five times a week, not necessarily to pay people but just to check out the latest updates in the app’s Newsfeed.
“So it’s a very different way of thinking about the wants and needs of this generation: The private-public boundaries are less,” adds Schulman.
That’s not so much as a surprise as it is music to the ears of profit-leaning app makers everywhere.
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