The National Retail Federation reported for the first time ever on Black Friday that more Americans shopped online than they did in stores. And amid the rapid global shift to digital and mobile payments, retailers took notice.
"There's a tremendous secular tailwind right now toward digital payments," Schulman said. "I think we kind of hit this tipping point this holiday season. And when I talked to a number of retailers, really woke them up to the fact that mobile payments, especially, is here to stay and is growing quite dramatically. We're seeing that across the world right now … [with] growth rates in Europe, Asia, U.S. all accelerating."
PayPal, which has more than 170 million active customer accounts, processed roughly four billion payments last year, a billion of which were made on mobile devices. And with the rise of Wal-Mart, Target, and Android Pay, the competitive landscape for payments is becoming increasingly fragmented.
"The biggest competitor that I see is cash," said PayPal's Schulman. "[Roughly] 85 percent of the world's transactions are still in cash today."
But he has high hopes for the future of payments. "I think we're going to see more change in the next five years than we've seen in the last 30," he added. "Money is digitizing and if you look at the millennial generation, they're really using their smartphones to manage and move money and that's just a look into the future."
And while many payment players have been betting big on point-of-sale technology, adoption has been relatively slow. "There's just not enough penetration right now," said Schulman. "So people are going into a store, finding they can't use that form of payment and then they're just abandoning it. What we're really trying to do is focus first on online and in-app payments, because that is naturally moving to the in-store environment."
"It's not going to be tapping your phone instead of swiping your card," he argued. "A consumer can order ahead, skip the line, pay right with your mobile phone, get rewards instantaneously. When that happens, then I think you'll start to see mobile payments in store start to take off."
PayPal stock ended Friday's trading just under $32, but is off about 12 percent year to date. Meanwhile, eBay shares were about 9 percent since the split.