Online auction house eBay has splashed out $800 million for payment platform Braintree, hoping to increase its PayPal mobile payments revenue by offering in-app purchases, v3.co.uk reports.
eBay president and CEO John Donahoe listed Braintree's strong technology portfolio and customer base as key reasons for the purchase. "Braintree is a perfect fit with PayPal," he said.
"Bill Ready [Braintree CEO] and his team add complementary talent and technology that we believe will help accelerate PayPal's global leadership in mobile payments. Together, we expect that PayPal and Braintree also will accelerate our leadership in supporting developers who are creating innovative solutions for next-generation commerce startups."
Braintree is payments platform was founded in 2007. Despite its young age the company lists itself as processing thousands of payments per year and prior to the purchase reported expectations to reach $12bn payment volumes in 2013. It expects at least one third of the volume to come from mobile payments. Braintree lists itself as having a specialization in offering payment solutions to app makers and small-to-medium-sized businesses.
The offering has proven popular with many business, with Braintree already providing payments solutions to numerous big-name companies including Airbnb, OpenTable, TaskRabbit and Uber. PayPal president David Marcus said the acquisition will let the company expand its customer base and improve its technology.
"PayPal was built on helping entrepreneurs grow great businesses online. I'm thrilled to welcome the Braintree team," said Marcus. "With this deal I believe that we will accelerate our capabilities for developers, entrepreneurs, merchants and companies that are building the future."
The deal is expected to close late in the fourth quarter of 2013, according to v3.co.uk. Once closed Braintree will continue to operate as a separate service within PayPal, though Braintree chief executive Bill Ready will report to Marcus. The purchase is not expected to affect any other Braintree employees.
PayPal is one of many companies looking to expand its mobile payments revenue. Barclays Bank made a similar push, launching a host of SMB-focused services for its Pingit mobile payments solution.
EBay boosted revenue and padded its customer count in its second quarter of 2013, but the growth failed to impress some investors. For the three months that ended June 30, the company posted $640 million in net income, or 49 cents per share.
Revenue rose to $3.9 billion, from $3.4 billion a year earlier, meeting analyst expectations.
The company grew its customer rolls to 119.7 million, from 116.2 million at the end of March and 104.8 million a year earlier.
For its PayPal payments unit, eBay said revenue rose 20% to $1.62 billion, from $1.36 billion in the earlier period. The marketplace division, home of eBay’s namesake site, saw revenue rise to $2 billion, from $1.81 billion.
The company has said it hopes to nearly double its active user count by 2015 and facilitate $300 billion in sales by that time, up from $175 billion in 2012.
