PayPal hopes to benefit from mobile payments through Braintree.
The Wall Street Journal has reported that the eBay owned PayPal is in talks with Braintree Payment Solutions to enable its emergence into the world of mobile payments. Currently Braintree (which has been in existence since 2007) is processing payments for around 4 000 merchants such as the well know Airbnb and at a 2.9% commission fee and 30 cent transaction fee, is processing over 10 billion USD per year. The deal would give PayPal access to Braintree’s data and hence, its profits.
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PayPal’s existing business is focused on online payment processing, largely, but not exclusively, for eBay customers. Given the projected mobile-payment growth of 31% (to 235.4 billion USD) this year, the expectation that this will triple by 2017 (according to Gartner research firm), the targeting and marketing potential within mobile payments as well the competitive influence of digital wallets, PayPay is extending itself beyond its present boarders.
And with mobile payment growth as it stands, Braintree’s mobile persuits are understandably, PayPal’s destination of choice – particularly its Venmo division (bought for 26.2 million USD), an application that enables end-users to pay each other for free.