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PegaWorld – PayPal and Innovation


Brad Strock of PayPal presented on innovation. He laid out the three stages of money:

  • Money 1.0 is what you might call traditional coinage and notes.
  • Money 2.0 was the credit revolution with revolving debt, credit and debit cards etc. These have become the pre-eminent means of payment for many people.
  • Money 3.0 is what PayPal sees coming – Digital and Mobile.

Brad polled the audience to demonstrate how rapidly people update their phones – hardly anyone is using an iPhone that is more than a few years old for instance. This pace of change shows up with competitors also – Honeywell never thought they would be competing with Google but Google’s acquisition of Nest means they are. Brad and PayPal consider the changes happening now have a lot in common with the industrial revolution. The industrial revolution changed the world dramatically in 100 or so years – urbanization, power, manufacturing, steel and more. The technology revolution, he says, is going to be equally disruptive but probably much faster.

To illustrate he used some stats – 4.5B mobile phone users (more than the number of people with toilets), 2.2B mobile web access, $90B in mobile payments, 80% of mobile users use the device in a retail store – mobile matters. He also points out that Moore’s law has led to dramatic increases in compute power with each generation but it also means that there are 10x the number of devices in each generation – 1M mainframes, 1B desktops, 10B mobile devices.

PayPal is supporting over $50B in payments and this is growing fast. They support 26 currencies, 80 localized sites and 193 markets. This creates tremendous pressure on PayPal to innovate and deliver new capabilities. As part of their technology stack, Pega is used to support customer service and back office operations.

Brad made the point that good people demand good tools. Good engineers want to develop using modern software and good customer service people want to use good CRM systems.

PayPal is also making a big commitment to Agile with hundreds of agile teams and a complete transformation from waterfall to agile.  Pega has been fully integrated into this approach with iterations being delivered in 2 week sprints. And the whole transformation effort has top level and extensive support from both business and IT. They have reorganized physical spaces to build collaboration. All in order to accelerate product development and to support this accelerating development. As PayPal has rolled out many more products in recent years (50+), the platform (and Pega) has had to be flexible and agile enough to support customers using these new products.

PayPal sees all this change disrupting existing business models and creating new opportunities. Companies, and individuals, he says must either lead this kind of disruption or be disrupted by it.


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