eBay Buys Payment Platform Braintree

eBay has taken a big step toward better positioning itself for the growing market of financial transactions on smartphones and tablets. On Thursday, the company announced that it is buying global payment platform Braintree for $800 million in cash.

The acquisition, expected to close in the fourth-quarter, is intended to boost the reach, technology and logistical capacity of eBay's PayPal unit, as well as provide the company with transaction fees and customer data. Braintree currently handles financial processing for such companies as online restaurant booking service OpenTable and travel service Airbnb, with a total revenue stream expected to reach $12 billion this year. About one third of that total is from mobile payments.

eBay President and CEO John Donahoe said in a statement that "Braintree is a perfect fit with PayPal," providing "complementary talent and technology that we believe will help accelerate PayPal's global leadership in mobile payments." He added that the acquisition will help to "accelerate our capabilities for developers, entrepreneurs, merchants and companies."

"Impressive Mobile Payment Solutions"

On the PayPal blog, President David Marcus wrote Thursday that Braintree "has built impressive mobile payment solutions that handle transactions in 130 currencies in more than 40 countries," and noted that "mobile developers love Braintree's tools and the great hands-on service." He said that he admires the company "because they were one of the very first companies to understand the power of real mobile-first experiences," not just traditional e-commerce used on a mobile device.

At this point, eBay is far beyond its original identity as an auction site, and is maneuvering to become a major player in global transactions. PayPal's 2013 mobile payment revenue is expected to be over $20 billion, and now accounts for about 40 percent of eBay's total revenue.

The Chicago-based Braintree also owns a mobile application called Venmo that allows users to pay...

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