PayPal Reportedly Close to Purchasing E-Commerce Processor Braintree (Sept. 23, 2013)
Sept. 23, 2013
PayPal Inc. reportedly is nearing a deal to acquire e-commerce payments processor Braintree Payment Solutions, which processes nearly $10 billion in annual payments for popular startups, including Uber Technologies, Rovio and Airbnb.
Sources familiar with the discussions did not disclose financial terms of the potential deal, and cautioned that the talks could still break down, according to a report in the Wall Street Journal. Founded in 2007, Chicago-based Braintree has focused on providing payment processing for startups and niche e-commerce firms. That approach has proven lucrative; Braintree has raised more than $70 million in funding and operates in more than 30 countries. The company’s transaction volume grew 25 percent in just four months earlier this year, in large part because of international transactions, which now account for more than a quarter of its payments. The processor charges merchants a 2.9 percent commission on sales, plus a 30-cent transaction fee. And in July, Braintree moved onto PayPal’s turf, shelling out $26 million to acquire P2P payment provider Venmo.
A deal for Braintree would enhance PayPal’s smartphone- and tablet-based payments business, bolstering recent expansion efforts that have seen the company grow its presence in brick-and-mortar payments. Access to Braintree’s payment data also would provide valuable insight into the purchasing habits of its clients’ customers—many of whom are young, technologically sophisticated and affluent.