The digital revolution is making transactions cheaper and easier for millions of people worldwide and will eventually push out traditional forms of payment, like cash, PayPal's Dan Schulman told CNBC on Wednesday.
"There are 2 billion people in the world that live outside the financial system, and the things that we take for granted — paying a bill, cashing a check, sending money to a loved one — are incredibly time-consuming for them," the online payment-service president and CEO told "Squawk Box."
"The promise of fintech is that you can make those transactions much quicker and much less expensive," Schulman said.
Fintech, or financial technology, is a type of financial service like PayPal, bitcoin and Venmo, where transactions are digitized and, according to Schulman, cheaper, because they are not subject to fees that often come with cashing checks or transferring money in person.
"If you can do it all digital, you can do it much less expensively, and you don't have to wait three days to get that money. You can do it instantaneously," he said.
With fintech becoming an increasingly popular method of payment, the "middleman" that converts digital transactions into cash may eventually be obsolete, Schulman said.
If you can do it all digital, you can do it much less expensively, and you don't have to wait three days to get that money.Dan Schulmanpresident and CEO of PayPal
"I think what we came to the realization of is that the war is really against cash and against waste," Schulman said, speaking from the World Economic Forum in Davos, Switzerland. "There's tremendous leakage in the system."
The CEO said examples of "leakage" could be as simple as losing a benefit payment check in the mail or as detrimental as government corruption.
"If we can collaborate in a productive way, which we've all decided to do, we can probably take the best assets of traditional financial institutions, the best assets of emerging technologies — Fintech — and create better value propositions," Schulman said.
In 2015, PayPal spun off from former parent eBay in a swift move to let the two companies narrow their focus and develop independently. EBay CEO Devin Wenig spoke to CNBC yesterday about central policy issues he'll be watching for after Inauguration Day.
