Insider Q&A: PayPal founder talks digital payments, bitcoin

This photo provided by Affirm shows PayPal co-founder Max Levchin. Levchin thinks the pace of innovation is progressing well, considering the banking industry is the most regulated this side of health care. But he considers the speculation around bitcoin to be “the elephant in the room.” He also thinks massive computer hacking attacks are threatening to reduce society’s trust in technology. (Affirm via AP)

PayPal co-founder Max Levchin ponders the pace of innovation in digital payments, security threats and the impact of speculative investing in bitcoin

SAN FRANCISCO — Max Levchin helped introduce the masses to the concept of a digital wallet when he co-founded PayPal in the late 1990s.

These days, he's still trying to use online services to reshape the world of finance. He is currently CEO of Affirm, a San Francisco startup that offers fixed-payment loans through the internet. It's an alternative to traditional credit cards, which can get consumers into trouble because small minimum payments they make each month can keep them in debt for decades.

Levchin, now 42, recently connected with The Associated Press to discuss the state of digital payments, computer security and bitcoin, a cryptocurrency whose value has ranged from about $1,000 to more than $19,000 this year as investors have bet on its future prospects. The interview has been edited for length and clarity.

___

Q: Are digital payments progressing as quickly as you hoped since you started PayPal?

A: They are moving at a good pace, adjusted for just how large and complicated the market is. It's highly regulated and there are a lot of things to be careful about. The elephant in the room for the last seven or eight years has been cryptocurrency. A big "what if" and "when if" has been surrounding bitcoin and its ilk.

Q: Why so?

A: The asset generally appreciated at such a blistering pace. Any time you acquire it, why not hang on to it? Because you just don't want to spend it yet. On the whole, it's a kind of transaction tool that is locked into areas where credit and cash don't really service the purpose. So you wind up finding it in somewhat darker corners.

Q: Do you invest in bitcoin?

A: I wound up with a lot of bitcoin as an early investor in one of the early bitcoin startups. But it wasn't a conscious decision to go buy a bunch of bitcoin.

I generally don't speculate. I am very old school in that sense. I try to understand how value is traded and what is going to happen to it in the very long term, not because I am a stranger to speculative investing. It's because I don't have time to time the market. So what I end up doing is committing to a stock or committing to a company.

Q: What are some of the most interesting areas of digital payments?

A: A good example is international remittances, where companies can pop up and do well. They're the guys who figured out how to do it much cheaper and much more transparently with much lower friction to both the recipient and the sender.

Q: Should we be concerned about hackers wreaking havoc with our financial system?

A: We should be worried broadly about our cybersecurity preparedness. I don't think it's specific to payments. It is just generally increasing the cost of doing business and reduces societal trust. And this is the first time in history where it's scary. Everything has got a chip. We are going to have to learn how to secure keys (secret codes for unlocking digital files and services).

Related News

4 malnourished Hawaiian monk seals taken to...

Aug 25, 2016

Biologists say four malnourished Hawaiian monk seals have been taken from remote atolls to a Big...

SpaceX Dragon returns to Earth with station...

Aug 26, 2016

A SpaceX Dragon capsule is back on Earth with scientific gifts from the International Space Station

Obama creates world's largest marine protected...

Aug 26, 2016

President Barack Obama will quadruple in size a marine national monument created by President...

State: Benghazi emails involving Clinton...

Aug 30, 2016

The State Department says about 30 emails that may be related to the 2012 attack on U.S. compounds...

Google to expand Waze carpooling service in San...

Aug 30, 2016

Google is set to expand a San Francisco carpooling program that could morph into a showdown with...

Rare whale's recovery hurt by entanglements,...

Aug 31, 2016

Scientists say the ability of an endangered species of Atlantic whale to recover is jeopardized by...

Peaple also read these

Google to expand Waze carpooling service in San...

Aug 30, 2016

Google is set to expand a San Francisco carpooling program that could morph into a showdown with...

FBI publishes notes on Clinton's use of private...

Sep 3, 2016

Hillary Clinton told the FBI she relied on her staff not to send emails containing classified...

Professors locked out of classrooms over labor...

Sep 14, 2016

A private university in New York City has locked out hundreds of professors as part of a labor...

Hungry startup uses robots to grab slice of pizza

Sep 14, 2016

A Silicon Valley startup is using robots and software to take a bite out of the pizza-delivery...

Survival of the smallest? Bigger sea species more...

Sep 14, 2016

In the Earth's oceans these days, the bigger a species is, the more prone it is to die off