Why PayPal is expanding in Berlin: an interview with CTO James Barrese
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“Did you see the game last night?” PayPal’s Vice President and Chief Technology Officer asks, just as we sit down to an interview in WebMagazin’s Berlin office. James Barrese, who tells me he tried in vain to watch the World Cup final from the Fanmeile at Unter den Linden, is here in town to expand the company’s German technology team.

PayPal is investing in a number of a new development positions for its Berlin location.

Barrese says the move is to bring the electronic payment service nearer towards local commerce, but while also including development of the multinational aspect of PayPal.

PayPal is a global platform, but what we want is a regional engineering team that’s closer to the market and understands the business, to enable us to move more quickly. And they’ll both do products that are unique, that they own, but they’ll also be able to go into our core platform to modify products to do a better job.

Located 45 minutes outside the city centre, PayPal shares the Ebay “campus” with other Ebay Inc. companies like Ebay Kleinanzeigen, mobile.de and eBay Advertising Group. Already employing 200 individuals in Berlin, the electronic payment service is currently recruiting a number of positions, mostly software engineers to join their agile development team.

Barrese can’t say exactly what staff increase is planned, but judging by job ads that have since sprung up on various portals, it looks like the developer team of 30 will soon double in size.

Why in Berlin?

Berlin can’t offer the tax breaks that European locations like Ireland and Luxemburg can. So what is it that’s so appealing about Berlin to a company like PayPal?

I’m really interested in fantastic technologists who can address a global set of issue. I think you can find that in lots of different location. It doesn’t mean you couldn’t find that in another region like Dublin. But what we decided to do was focus here because we had the ability to hire some great people. I think there’s a lot of entrepreneurial technologists here.

PayPal’s German presence is based on its previous acquisition of Billsafe, a German purchase-on-invoice tech firm, which it is continuing to develop.

Barrese says he sees the multi-cultural aspect of Berlin as another advantage. Serving the EMEA (Europe, Middle East and Africa) region, PayPal’s Berlin office is multi-cultural environment by necessity.

Global and local

Barrese can’t comment on what exactly it is that he’s up to with the new Berlin tech teams, but it seems the tech projects will have both multinational and regional dimensions.

We’ve got 148 million active users. So this team will be working on global products. They need to be able to quickly learn either new technologies, new devices or go into any part of our platform and be able to extend it and expand it.

While PayPal’s Berlin tech projects are to be part of a global portfolio, some of these area may be unique to the Berlin office, Barrese adds.

James Barrese PayPal CTO and SVP
PayPal’s CTO and SVP James Barrese is in Berlin looking for new tech talent

Looking at Berlin’s tech scene from the Valley

At this stage most European capitals are hyping themselves as budding tech hubs and startup hotspots. So does Berlin really stand out of the crowd of Valley-wannabes?

I would say Berlin has got a really vibrant scene, and it’s growing. I’m really attracted to the talent here, it’s part of the reason we came here. I think we can find really strong people. Obviously it doesn’t have the size of Silicon Valley or the history. But I’m still seeing very positive opportunities and great engineers.

Barrese believes part of the magic behind Silicon Valley is it’s creation of a culture of sharing, networking and collaboration, even between competitors. “There’s a whole ecosystem that has developed in the Valley that feeds itself,“ explains Barrese. „And the degree that that can work here, keep that.”

Expanding on his tech knowledge, Barrese warns that Berlin startups should try not to get caught up with fads and trends.

There are these cool, hip memes, almost, that go through the tech industry. For a while it was social networking, and before then it was probably search or e-commerce. Instead focus on what fantastic customer value that you can enable. So be really passionate about solving a customer pain point.

Giant competitor or local startup enabler?

Germany’s startup scene has given rise to much innovation in mobile banking. Berlin-based payment apps like Avuba and Numbrs might see PayPal’s expansion in Berlin as a threat. But Barrese tells me he doesn’t see them as competition.

Actually we think the best ones is where we have an opportunity to partner with, because we’re a payment platform. We’ve really been focussing on our developer tools and our APIs. If you’re a startup, you don’t want to spend time on compliance and PCI and security.

Only recently PayPal announced a cooperation with Payleven in Germany, which allows customers to pay at a shop’s checkout using their smartphone and PayPal account.

In addition to local and global apps like MyTaxi and EasyPark, PayPal is also collaborating with the local startup orderbird to enable electronic payments via OrderBird’s iPad billing system for restaurants.

Generally we think we can partner with many of those companies. Obviously, some are competing with us, depending on what they’re trying to do. But the best situation is for us to make payment so easy that they can focus on innovating in the experience. That’s our preferred model, to go to market with a strong partner.

Berlin’s e-commerce and tech startups may indeed be open to synergies with PayPal. But with the increased presence of a tech giant like PayPal, there’s no doubt that the search for talent in Berlin’s tech scene just got more competitive.


Feature image: PayPal payment system logo on tablet and new smarphone, in Kiev, Ukraine, on June 9, 2014. via Shutterstock / copyright: Sukharevskyy Dmytro (nevodka)

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