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21st Century Regulation

PayPal is at the leading edge of the global, technology-enabled payments industry, serving 137 million consumers, entrepreneurs and businesses of all sizes in 193 markets around the world. The industry has seen tremendous innovation and competition from players large and small, with rapidly evolving technologies driving change and progress towards a brighter future.

The payments industry is one that government policymakers and regulators around the world care deeply about.  Yet, it is a common refrain among technology leaders that regulatory processes are far too slow to adapt.  The general sense is that government cannot keep up with the rapid pace of innovation and creativity that is at the heart of today’s successful business operations.  PayPal believes that while specific regulatory processes or policies may seem frustratingly outmoded, it is critical to begin any meaningful discussion of payments regulation with a clear recognition that the core, real world, societal goals that underpin payments industry regulation are timeless and valuable.  Government goals of protecting consumers from fraud, fighting criminal abuse, protecting the stability of the financial system, and promoting commerce, economic empowerment and innovation are all important goals that PayPal supports and believes other industry leaders share.

The challenge is developing new regulatory models that better achieve societal goals and also support rapid innovation.  PayPal is stepping forward to meet this challenge by beginning a collaborative discussion about how increasingly ubiquitous 21st Century technology and data-analytics techniques used by technology-enabled organizations can be used by government regulators to make better and faster decisions to help deliver better results.

This is a global challenge, and in response, PayPal is releasing reports and engaging in collaborative discussions this week in Singapore, Washington, DC and Trieste, Italy.  The concept is not overly complicated.  We recommend that regulators use the same data analytics techniques that have transformed the “high tech” payments sector in the same they have transformed the healthcare and getting-a-taxi industries.  These techniques rely on collaboration and iteration; they use technology and data to measure performance and delivers results. We believe that implementing this new approach will enable regulators to better achieve their goals, benefit consumers, and allow for a faster pace of business innovation.