PayPal chief in CEE enjoys being a mobile manager

With the number of transactions it processed globally having jumped 22 percent last year, and with its revenues increasing 26 percent to $5.6 billion, PayPal is capitalizing on the growing popularity of online retailing.

In Central and Eastern Europe, the company is expanding even faster, with significant opportunities for growth presented by a market that is in an earlier stage of development than that in Western Europe.

Managing this growth is Damien Perillat, who is based in Paris but has a team of staff in Warsaw helping him to deal with the demands of looking after more than 20 countries.

He spends much of the time on the road and when he arrived in the Czech Republic recently, he sat down with The Prague Post to talk about the company's global and regional business.

TPP: How much more popular is it becoming for people to carry out online transactions using a mobile phone?

DM: Last year, we passed a milestone: Ten percent of the payment volume we processed was with mobile devices. That is 14 billion payments processed out of a bit more than 140 billion globally. It's 70 times bigger than the whole Czech e-commerce market. Now, 15 percent of the global Internet traffic comprises mobile Internet devices. In India, you have more Internet traffic coming from mobile devices than from desktops. The consequence is that the way you access information from the website is completely different. If you're a retailer, you're going to have a fair number of your customers accessing your services from a mobile device. That forces you to rethink the experience you give your customer … to simplify the user experience. When you have 15 percent of your traffic from mobiles, it's not going to stop; it's going to accelerate.

TPP: Have Czech online retailers adapted to this trend?

DP: If you get a big website like eBay or big British or German retailers, most likely they're going to have a big mobile-oriented website, but that's not the case in the Czech Republic or Central and Eastern Europe. You have very few online retailers with a mobile-customized website.

TPP: Is that because people are not using mobiles for online transactions in this part of Europe?

DM: In [Central and Eastern Europe] it's 4 percent to 5 percent. If we take our Czech user base, we see a big difference if the transaction is at home or abroad. We see three times more mobile usage when the transaction is taking place abroad.

TPP: Do people worry more about fraud when they are using mobile phones for transactions?

DM: Security and safety is a big topic for anything happening online. In our case, there's no information stored on your mobile phone or on the SIM card, which is not the case for everybody. Your digital wallet is in the cloud, so the level of security is the same, perhaps greater, with a smart phone because you need to identify yourself. One of the key differentiators with our solution is that no information is stored on your phone.

TPP: PayPal's worldwide revenues are growing fast, but what is the situation in this region?

DP: Our growth rate in the region is much faster than we see globally. You have a very strong appetite of Czech customers to buy products from abroad, because it's cheaper. They find products or brands they cannot find locally. That's the beauty of the European Union: You don't have to worry about the duties or shipping. When you take a sophisticated e-commerce market like the United Kingdom or Germany, 10 percent or more of retail sales are done online. In Central and Eastern Europe it's more like 3 percent or 4 percent. If you want Central and Eastern Europe to be at the level of maturity, you can multiply it by three [compared with what it is now].

TPP: How do banks view PayPal, given that you charge transaction fees they might otherwise have been able to collect?

DM: PayPal is sitting on the banking system. To do a PayPal transaction, you need to have a banking system or a bank account. We have established partnerships with banks. We have a very successful partnership in Poland with a very innovative bank. Either a bank can decide to build [a system] by itself, or they can partner with someone like ourselves and they get an existing technology and reach of merchants across the globe. It's a short cut for banks if they partner with us.

TPP: What is it like having responsibility for such a large area geographically?

DM: I am just traveling most of the time. We started in Bratislava, next week we're in Greece, two weeks before we were in Hungary. We use Paris as the regional headquarters for Continental Europe, the Middle East and Africa. I can sit down with my colleagues [in Paris] from product, marketing and finance, with my team in Warsaw - we have about 15 people there - and spend time in the market. I have meetings with partners; they can be mobile carriers or banks. I spend a lot of time in conferences to meet with startups, with developers, people working on the next things that are going to happen - anywhere with my laptop and a table.

TPP: Do you find the travel wearing?

DM: I love it. I don't believe you can do any business by sitting in the office and meeting with people there.

Daniel Bardsley can be reached at
business@praguepost.com