eBay acquires Braintree digital payments platform for $800M
eBay has reached an agreement to acquire digital commerce startup Braintree Payments Solutions for approximately $800 million in cash.
The Braintree platform enables developers, merchants and other clients to accept payments within their mobile apps and websites, collecting a 2.9 percent commission and 30-cent transaction fee on each purchase. Partners include Airbnb, OpenTable, TaskRabbit and Uber. Braintree is on pace to process more than $12 billion in net total payment volume this year, with mobile transactions driving one-third of that total.
Braintree will join eBay's PayPal business unit. The deal also includes Braintree's Venmo mobile application, which enables consumers to transfer funds to friends to simplify splitting restaurant tabs, utilities, rent and other bills. "[Braintree CEO] Bill Ready and his team add complementary talent and technology that we believe will help accelerate PayPal's global leadership in mobile payments," eBay president and CEO John Donahoe said.
Braintree will continue to operate as a separate service within PayPal, with Ready remaining at the helm and reporting to PayPal President David Marcus. Braintree's existing management team and staff are expected to stay in place as well.
"As a separate service offered by PayPal, Braintree will be able to scale its platform at a rate that is just not possible for a startup," wrote PayPal's Marcus in a post about the transaction. "PayPal's already solved many of the regulatory and logistical hurdles that will help to extend Braintree's reach to more customers in more markets even faster. Our resources will enable them to push the boundaries of innovation with ambition and confidence for consumers, merchants and developers around the world."
PayPal's existing applications for Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android enable consumers in close to 125 international markets to make payments at restaurants, stores and other businesses. Users may also send and request funds, browse nearby offers and order food ahead of pickup. The company's mobile efforts also include PayPal Here, which enables small businesses and other users to process credit and debit transactions by swiping cards through a dongle that attaches to their smartphone or tablet. PayPal Here charges U.S. merchants a flat rate of 2.7 percent per transaction, a .05 percent savings over rival Square's mobile payment offering. Earlier this month, PayPal unveiled Beacon, an add-on technology enabling consumers to complete in-store mobile payments without removing their phone.
PayPal is expected to handle around $20 billion in mobile transactions this year, up from $14 billion a year ago. Research firm eMarketer reports mobile commerce-enabled transactions across the United States will reach $41.68 billion in 2013, increasing 68.2 percent from 2012 totals of $24.78 billion.
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