Investing in the Last Mile: PayPal’s Khatereh Khodavirdi

**Sam Ransbotham** (0:02)
What do Lego have to do with how PayPal thinks about AI? Find out on today's episode.

**Khatereh Khodavirdi** (0:09)
I'm Khatereh Khodavirdi from PayPal, and you're listening to Me, Myself, and AI.

**Sam Ransbotham** (0:16)
Welcome to Me, Myself, and AI, a podcast on artificial intelligence and business. Each episode, we introduce you to someone innovating with AI.
I'm Sam Ransbotham, professor of analytics at Boston College. I'm also the AI and Business Strategy guest editor at MIT Sloan Management Review.

**Shervin Khodabandeh** (0:34)
And I'm Shervin Khodabandeh, senior partner with BCG, and I co-lead BCG's AI practice in North America. Together, MIT SMR and BCG have been researching and publishing on AI for six years, interviewing hundreds of practitioners and surveying thousands of companies on what it takes to build and to deploy and scale AI capabilities and really transform the way organizations operate.

**Sam Ransbotham** (1:00)
Today, Shervin and I are talking with Khatereh Khodavirdi. She's the Senior Director of Data Science at PayPal.
Khatereh, thanks for joining us. Welcome.

**Khatereh Khodavirdi** (1:07)
Thanks for having me. Great to be here.

**Sam Ransbotham** (1:10)
You build and oversee giant data science teams for the many different entities within PayPal. A lot of people know PayPal, but probably some people don't realize the extent of all the PayPal activities. So maybe let's start there.
Tell us a bit about what PayPal does and what all these different sub-entities do as well. How are they connected?

**Khatereh Khodavirdi** (1:31)
Yes, I would say majority of the people know PayPal through PayPal checkout, which is a core products that we have and the company has started from that product. But we have a lot of different products, especially on the consumer and merchant side. We have whole suits of product to provide people the capability on the merchant side to run their business from invoicing, having the offline capability for the financial services and then the online transaction.
And on the consumer side, starting from peer to peer payment to financial services, to different types of credit and buy now pay later capability and saving accounts. I can go on and on, but on the consumer side, we have wealth of different product. And over time, we also acquired many other companies to help us accelerate and also be incremental in terms of the value chain that we are creating for the consumer and merchant. Such as on the consumer side, a couple years ago, we acquired a company which name is Honey, which is actually help you to find the best deal on the internet when you're shopping online. I started at PayPal on the consumer side. So I was helping the small business group, helping accelerate and solve the problems for our customers through data and data science capability. And then over time, I kind of supported all the merchant side of our equation, all the enterprise merchant channel partner, our relationship with Shopify, you know, WooCommerce, Magento, that programmatically bringing a merchant for us.
And then a couple months ago, I actually switched completely on the consumer side of the house. So I'm new on the consumer side, but super excited because you can leverage a lot of AI and data science capability to solve a lot of interesting problem in this domain.

**Shervin Khodabandeh** (3:20)
That's great.
So obviously PayPal is a big multifaceted company with different businesses and subdivisions. And you talked about those, but since you're in the consumer group, let's talk about that. Share with us a bit how AI is being used in the consumer business to drive the themes that you want with your consumers and what use cases is AI being used for.

**Khatereh Khodavirdi** (3:43)
We can actually bring all the different accounts together. So we have a point of view around the user and traction with us. For example, if Shervin has a relationship through Honey with us, but at the same time he's using peer to peer or the checkout product or our credit capability, how can we make sure that we can actually look at Shervin relationship with PayPal through one lens? So that is, I would say, one of the fundamental problems we are trying to solve as a company. But the piece I'm personally super excited about is around the fact of understanding the customer journey with us and how we can leverage personalization and AI to actually solve customer use cases, that what are the jobs they are coming to PayPal to get done and how can we show them the personalized and relevant messages to help it? So think about it, internally, we always said, hey, there are a bunch of happy paths with PayPal and there are a bunch of sad paths with PayPal. How can we migrate people from one happy path to a happier path with us? And how can we avoid the sad path with the customer? And I truly believe that this is basically an AI capability that we need to develop for the customers. But if you build that, it will unlock humongous amounts of value for our consumer and for us as a company.