The mobile payments market is growing quickly. Gartner speculates it to be worth $235.4 billion this year, a number that is expected to triple by 2017. That means it could be worth at least $700 billion in just a few years. And PayPal wants to be at the forefront.
The e-commerce payment platform is close to buying up mobile payments platform Braintree Payments, according to a report from the Wall Street Journal on Sunday.
Its easy to see the benefit for PayPal in the deal: it would be making a windfall of profit. In July of this year, Braintree announced that it was processing over $10 billion annually from over 4,000 merchants. And at least $1.5 billion of that money came from mobile platforms.
PayPal has been making inroads into the mobile payments space, In March of last year, PayPal announced the release of its triangle dongle, called PayPal Here, which processes mobile payments for small businesses internationally. Last year, PayPal processed more than $14 billion in mobile payments, a 250% increase over 2011’s $4 billion.
But PayPal has mostly been focused on providing payments for small businesses, and buying up Braintree would also give PayPal an inroad to processing payments for higher end merchants. The company’s solutions have been used by companies like Rovio/Angry Birds, LivingSocial, Airbnb, Fab.com, OpenTable, Uber, LevelUp and HotelTonight.
There was no indication of what the final price for the Braintree acquisiton might be.
A PayPal spokesperson has declined to comment on the story. VatorNews has also reached out to Braintree CEO Bill Ready for confirmation and we will update if we learn more.
About Braintree
San Francisco-based Braintree is an e-commerce and m-commerce platform that allows for single click payments. It provides merchants with a secure payment gateway, merchant account, recurring billing and credit card storage.
Here’s how it works: When a someone uses a credit card on an app, Braintree will store the information from that card and allow the user to automatically use the same card on another app, without having to re-enter the information.
Braintree operates internationally, and merchants in 40 countries in North America, Europe and Australia can accept payments in over 130 currencies.
When I spoke to Braintree founder Bill Ready back in March, he drew a sharp distinction between Braintree and PayPal.
According to Ready, whereas the last decade was dominated by PayPal, the next decade of payments will be dominated by companies like Braintree, aka the ones that make it easier for consumers and merchants to connect.
On top of that, he told me, not only does PayPal typically work with small merchants, while Braintree works with higher end merchants, PayPal also gave up sophistication over the last decade.
It looks like Ready has had a change of heart.
Founded in 2007, Braintree has raised a total of $70 million in two rounds: a $35 million Series A from Accel Partners in June 2011, and a $35 million Series B from Accel Partners and NEA in October 2012.
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