Big news in the payments world this morning: eBay just announced that it has snapped up popular e-commerce payments processor Braintree for $800 million in cash.
Braintree’s technology gives companies a complete solution to accept payments, including credit cards, without worrying about extensive payments infrastructure. The company competes with the likes of Stripe and credit card companies, and it was also one of the biggest threats to PayPal over the past few years. The deal is expected to close by the end of the year.
“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 CEO David Marcus in a blog post today. “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. It’s business as usual for Braintree. Braintree will continue to maintain its best-in-class service for its customers and developers for the foreseeable future.”
Braintree announced in July that it was processing more than $10 billion in payments. As of today, the company says it’s handling more than $12 billion ($4 billion of which is in mobile). Braintree also just recently released its Venmo Touch product to the public, a digital “unwallet” that other apps can access to make payments, after buying Venmo last year for around $26 million. The company offers payments for 4,000 merchants, covering a potential 40 million customers, and operates in 40 countries. Its current customers include big tech firms like Uber, AirBnB, LivingSocial, and Rovio.
All of those items likely made Braintree an enticing buy for PayPal (and something that it wouldn’t want competitors to snap up). PayPal says it expects to handle $20 billion in mobile payments this year and that Venmo will “help to contribute” to its mobile payments prowess.
“The consumer side and the merchant side have to come together for the next generation of e-commerce,” Ready told us when Venmo Touch launched. “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.”
Founded in 2007, Chicago-based Braintree raised $69 million in funding from investors including New Enterprise Associates, Accel Partners, RRE Ventures, and Greycroft Partners.