Online retailer eBay has agreed to acquire global payment platform Braintree for about $800m to enhance mobile payments capabilities of its payments service PayPal.
The deal will provide eBay access to Braintree’s mobile application Venmo that allows consumers make payments on mobile devices like smartphones and tablets.
PayPal’s mobile payment volume is expected to be more than $20bn this year. It contributed 40 per cent of eBay revenues in 2012 and has 120 million users.
Bill Ready, CEO of Braintree, said: “The alignment with PayPal means Braintree can continue to push the boundaries of innovation while expanding into new markets with increased speed and confidence.”
Braintree provides merchant accounts, billing and credit card storage services to more than 40 million consumers worldwide. Online firms like Airbnb, Uber, OpenTable, and TaskRabbit use Braintree’s payment platform.
After the closure of the deal, Braintree will operate as a separate service within PayPal under the leadership of Bill Ready, who will report to David Marcus, president of PayPal.
John Donahoe, president and CEO of eBay, said: “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.”
The transaction, which is subject to regulatory approvals, is expected to close in the fourth-quarter of 2013. The deal will not affect management team and employees of Braintree.
Meanwhile, eBay shares grew 4.4 per cent on the Nasdaq yesterday.