EBay inked a deal to buy global payment platform Braintree in a roughly $800 million bid to better the mobile payment experience.
Ebay president and chief executive officer John Donahoe called the solution a “perfect fit with PayPal.”
Braintree will operate as a service within the eBay-owned PayPal, which projects its mobile payment volume will exceed $20 billion by year’s end.
The transaction with Braintree, which has worked with Uber, Airbnb, OpenTable and TaskRabbit, is expected to close in the fourth quarter.
Braintree’s Venmo mobile application gives users an easy way to pay each other using mobile devices and leveraging social networks.
While shoppers won’t notice the impact of the acquisition this holiday season, they should start to see an improved mobile shopping experience next year, said Anuj Nayar, PayPal’s head of strategic initiatives.
“One of the things that is difficult about the payment industry — [and] I am happy that payment is a regulated business — is for payment companies to expand internationally,” Nayar told WWD. “It’s very difficult for a Silicon Valley start-up in the payment space to rapidly grow internationally because every market in which you move into has a different set of regulations and policies.”
The nearly 15-year-old PayPal is in 193 countries, while Braintree operates in just 40 — but Nayar said this deal will allow Braintree’s customers to take advantage of PayPal’s relationships to accelerate expansion.
PayPal ended 2012 with $145 billion in total payment volume — with $14 billion, or nearly 10 percent, coming from mobile devices. In 2009, the payment giant did just $141 million in mobile payment volume.
According to eMarketer, total mobile commerce, or m-commerce, sales are projected to reach about $39 billion in 2013, comprising about 16 percent of all U.S. e-commerce sales.
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