Braintree is making another move in the battle to create a digital wallet people actually use. The digital payments company today announced a partnership with online bank Simple to roll out its one-touch payment product to all Simple customers.
The announcement was made at today’s MobileBeat event in San Francisco.
Braintree’s payment gateway helps businesses quickly and easily accept credit cards online. It enables payments for 40 million consumers and works with over 4,000 merchants, including high-profile tech companies like Uber, AirBnB, Hotel Tonight, LivingSocial, Fab.com, TaskRabbit, Rovio, OpenTable, Poshmark, Trunk Club, and Github. Braintree publicly released Venmo Touch in April 2013 which allows consumers to pay with one-tap across all Braintree powered apps.
The collaboration with Simple marks Braintree’s first direct banking integration. Simple is an entirely digital alternative to traditional banking. People can deposit checks, setup direct deposit, earn interest, pay bills, withdraw cash, and manage all their finances through Simple, using a Visa Simple card, and keep funds in an FDIC-insured account though a partner bank. Simple will integrate Venmo Touch directly into its banking application, and from now on, card issuers working with Braintree will also be able to bring Venmo Touch to their customers.
“Mobile requires a completely new experience for the consumer,” said CEO of Braintree Bill Ready to VentureBeat. “As consumers are increasingly using mobile devices as their primary computing device, they are demanding a higher-level of convenience and quality from their interactions. This is creating a major need for banks and retailers to transform the experiences they offer to compete in the new mobile economy. This partnership is a glimpse into what people will expect of all their banking and purchasing experiences in a post-PC, mobile-dominated world. “
Mobile e-commerce is soaring and people are using their smartphones to do everything from banking to shopping for a new pair of shoes. However transacting through a mobile device generally involves the frustrating process inputting credit card information and raises security concerns for many users. Ready said that thirty percent of e-commerce sessions happen on mobile, but the conversion rates fall by 75 percent because people don’t want to do data entry on a touchscreen. Venmo Touch is intended to be like Facebook Connect for mobile purchases. Extending the one-touch simplicity to Simple customers is a step closer to a world where all transactions are done from mobile devices.
Many other companies are trying to build digital wallets. The main hurdle is building critical mass on both sides of the marketplace — merchants don’t want to accept a new payment platform if there are no consumers using it, and consumers won’t download a new payment platform if no merchants accept it. This impasse has prevented large and small companies alike from gaining any serious traction. Companies like PayPal, Google, Square, and Mastercard offer digital wallets, but people don’t use them. A recent study by Comscore found that only 51 percent of U.S. consumers are even aware of digital payment providers and just 12 percent of people actually use them.
“The consumer side and the merchant side have to come together for the next generation of e-commerce,” Ready said in a previous interview with VentureBeat. “Payments will become a network effect play about who can make it easiest for merchants and consumers to connect with one another with context-driven experiences. To do that, you need to have thousands of merchants and millions of consumers. We are thinking that this platform, if we do this right, will be as important for next decade of commerce as PayPal was for the last decade.”
Integrating with a bank helps Braintree gain a competitive edge, and helps banks be “top-of-the-wallet” in the mobile economy.