James Barrese on how PayPal learned to listen to its developers

​API Economist: What challenges was PayPal facing with its developers?

James Barrese is chief technology officer of PayPal. He has more than 25 years of technology experience that spans the military, the academic world, business consulting, and enterprise platforms and infrastructure. James leads PayPal’s efforts to transform payments with innovative products and services for consumers and businesses. In 2011, James moved over to PayPal from eBay, first as vice president of global product development, and, beginning in 2012, as chief technology officer.

James Barrese: I'll be frank. As an organization, we had not been listening like we should have. We were growing so quickly and dealing with some parts of the business that we didn't pay as much attention as we should have. That's changed. So, in the last year, David Marcus has been named as president. He came through our acquisition of Zong. He's a great technologist and a great entrepreneur. I was named as CTO in the last year as well. What we're doing is we're driving a renaissance at PayPal and essentially going back to our innovative roots. And right away we saw we really needed to listen to our developers.

Effectively, what you are seeing is what our developer community was asking for, and we started innovating again. We're coming back with a much simpler API set. We're improving our sandbox and documentation. We've come up with a new mobile payment library. We're just responding to what the developers were asking for as well as getting everything modern and simple to use.

API Economist: You guys made a big splash at SXSW (South by Southwest). You launched your next generation developer tools. What was the reaction there?

James Barrese: We got a lot of very positive feedback and press. Not too long ago, the same developers who were lambasting us publicly were coming to our booth and they were extremely positive. We actually ran a little hackathon there. We had a contest with a leaderboard running to see who could be the fastest to implement one of our new APIs. And over the days it went from 120 seconds and kept on ticking down. Ultimately, somebody was able to be successful in 11 seconds. What came through was a strong appreciation for how we have simplified things for developers.

I feel very good about our presence at SXSW [South by Southwest Festival]. It was a fantastic experience. As I mentioned, we had a lot of very positive press. When there was a negative comment, we didn't actually have to say anything. Our developers jumped in and said, "Hey, PayPal is doing great stuff here." It was really cool to see that turnaround in the developer community. They are super valuable to our strategy. We want to empower them with a great platform and help build a vibrant community.

API Economist: Your industry is going through a good deal of disruption. What are you seeing at PayPal?

James Barrese: At a high level, what we're seeing at PayPal is just, to your point, the industry is changing. Consumers are rapidly changing their behavior. They are adopting new technologies. These technologies are getting smaller, better, faster, cheaper, more mobile. The trend is making it go from where we used to talk about web commerce, or e-commerce, or what we're doing on a mobile device, to an omni-channel view of the world. People are on-the-go with their mobile devices. When we look at payments and what's happening to commerce in general, we recognize that we need to have a compelling experience for consumers in this omni-channel world. And so we've been investing in our platform.

We’ve been making significant investments for a number of years and have over 190 regions and countries that we have plugged into. We have over 123 million active users in our network.

You could imagine the PayPal platform being a global financial network, and we have tapped into the US banking network, card networks, and international financial networks. We allow pretty much anyone to pay anyone else anywhere in the world.

We’ve had the digital wallet for a number of years. It wasn't called that, but PayPal has always allowed you to load up all your cards and your bank information into our digital wallet. We started out on the web, and now we are the leader in mobile. And, we're actually going to physical point of sale.

Actually, PayPal customers are going to be getting a card. You can think of it as a computer science pointer to different payment methods in your digital wallet. When you go pay and check out at a store, it's going to allow you access to your digital wallet through the traditional financial network. In addition, you'll have your mobile device.

We are creating all kinds of payment vehicles in experiences such as ordering ahead. Using the PayPal mobile app, you can actually find the local Jamba Juice, check into it, see their menu, and order ahead. When you get there, it's paid for. It's waiting for you. That's a pilot that we're doing with Jamba Juice in select locations in California. It’s an example of the types of changes that are happening really quickly in the industry.

API Economist: And developers?

James Barrese: Coming back to developers, absolutely the way to do this is to enable them to build upon our platform. It's a classic platform strategy. We're in the business of enabling commerce, of enabling payments. We want to enable all those innovators and all those developers in all the industries across the whole world to be able to take their solutions into this new space.

API Economist: What have you done organizationally at PayPal to address developer outreach?

James Barrese: We are investing in a developer platform team. We’ve named John Lunn as the new head of developer evangelism. He’s a great technologist and very creative. John's team is tasked with engaging developers at hundreds of events around the world to learn more about what developers want from us and how we can help them innovate.

API Economist: It seems more and more organizations are moving mobile app development in-house. Was this some of your thinking when you guys acquired Duff Research?

James Barrese: We changed our strategy. We adopted a mobile-first strategy. Every single one of our applications and experiences are now looked at from the standpoint of this omni-channel world. We need to deliver a compelling mobile experience.

We saw that Duff Research was this great company with a lot of deep expertise with building fantastic and award-winning consumer mobile apps. A lot of companies have a mobile business unit. We don't have a mobile business unit. We actually eliminated that and we integrated our mobile teams directly into our product lines. So we don't have separate mobile teams.

We had a fairly large gap in the number of people that we needed to go drive this mobile-first strategy. And it was a perfect fit. They were innovative, creative, awesome, and we're putting them right on top of a number of our key products.

API Economist: There is a lot of fierce competition in your space, from big players like Visa to start-ups like Stripe. What makes you feel good about your approach and strategy?

James Barrese: We have a global platform. We connect merchants and consumers, and we can add value to the entire equation. So, we're actually making the payment experience better for everybody involved, on a global basis. All of the other competitors are niche. They do a piece of the financial puzzle. We do the end to end connection.

API Economist: What advice would you give to other organizations that are looking at opening up their APIs?

James Barrese: I would treat developers like you do your other customers. Just like you have different customer segments, you need to make sure you're treating them, developers and engineers, as a customer. What are the use cases, what are the scenarios, what are the products you're going to give those developers? It's got to be a core part of your business, not an afterthought. It should be part of your strategy. If you want to be successful, you've got to make it a major product.

API Economist: People always complain about transaction fees. Can you give people an appreciation of why fees exist in the first place when making payments?

James Barrese: It all comes down to the value that is added to the payment transaction. For example, not even handling cash is free. You've got to pay somebody to handle it, count it, and sort it. There's risk of loss along the process with cash that's extremely high. Everything in the payment transaction has cost.

PayPal adds value by streamlining that process. For example, how would you make a payment to somebody in, let's say, Singapore? Do you write a check? Will the bank accept the check? How do you send a wire to the bank?

What we're handling is all of the risk. We're protecting the consumers and we're doing risk management for sellers. We do all of the currency management for global trading platform and all the different payment types. This also includes security, PCI compliance, and global compliance. All of that is something that is hard to do and it costs money. We handle all of this complexity so our customers can focus on their business: enabling buyers and sellers to connect.

API Economist: What are some of your favorite mobile devices and favorite apps that you enjoy using?

James Barrese: The iPhone and iOS devices are my favorite. I use a whole bunch of different apps‑the classic Facebook, Twitter, iReddit etc. I actually have a couple that I really like, which is the Nike running app and Strava for biking. Then there's a great app, MyFitnessPal, which has an amazing database of pretty much every food on the planet. It allows you to barcode scan. I haven't found a single thing that it isn't able to pull up nutritional information on. It's really impressive.

API Economist: James, thanks for your time!

James Barrese: It’s been good talking with you!