Convergence and Simplicity Are Key in Electronic Money

Angelo Meregalli heads the Italian division of PayPal, the US giant dominating the online payment industry, which has opened the gates to an increasingly digital, simple and interconnected future. Meregalli got his MBA from SDA Bocconi School of Management in 1998, the very same year the company currently employing him was founded in Palo Alto, California. According to him, an expert on digital payments, whose growth in Italy is now favored by the Budget Law of 2016 and the parliamentary bill to limit the use of cash and foster the development of electronic payment tools, bringing innovation to the industry means to "break the barriers surrounding past business models; seize the emerging needs of customers; enable efficient places for demand and supply to meet; reduce operating costs according to a sharing economy logic."

➜ What's the future of payments?
The bank without tellers, existing only in the cloud, is already a reality. So next to the virtualization of money and brick-and-mortar banks, digital skills will be applied to identify new clients. Passwords will soon be replaced by fingerprints or iris scans, thus making payment operations instant and secure.

➜ Is the user adapting to technology or the other way around?
It should always be technology adapting to the client.

➜ How do you create convergence between online and offline worlds?
Thanks to ease of use, low costs, multichannel and social media communication: this strategy especially works for younger cohorts where the smartphone is the axis around which daily activity revolves.

➜ What is the role played by social media?
There is a pronounce trend towards offering consumers various functions with a single solution. Social media are becoming places where you make purchases, as the example of WeChat demonstrates. Digital ecosystems are coming into being where devices, people and business interact.

➜ What is the behavior of Millennials with respect to online payments?
Italian youth aged 18-26 tend not to have personal credit cards. Like Italian teenagers they would like to have access to this payment channels. Abroad, the financial system is better suited to accommodate the needs of younger customers.

➜ What about the rest of Italians?
If you take average values, Italy trails behind in electronic money. Government offices are the first not accepting credit card payments or digital transactions. In Sweden, conversely, all payments to the public administration are made without cash. There is also a generational problem: while the population whose age is comprised between 25 and 55 years of age is connected to the Internet and used to making online purchases, Italians over 55 are still rooted in the old ways. They basically rely on cash and when they have to make online payments give the chore to younger relative who can make them feel psychologically secure.

➜ How can this tendency be inverted?
The traditional system of how we deal with money is hard to discard. In order to do so, we should make credit card payments simpler and provided reporting tools that create trust in these new means of payment.

➜ Is PayPal a bank?
In the EU, where existing regulations require it, PayPal is indeed a bank, although not in the traditional sense. We offer forms of credit to private customers who make major purchases and make credit advances available to SMEs. In the US, we have just launched a pilot on savings deposits at a guaranteed rate designed with the thirtysomething generation in mind. During transactions, the user can round up the payment allocating the difference to a fund.

➜ What kind of relationships exists between PayPal and credit institutions?
We are in very good terms. We are the main customers of banks, and banks themselves are asking to integrate PayPal in their supply of payment services, in order to facilitate users. In effect, there is a relation of coopetition between us and banks.