EXCLUSIVE- Four years ago in September, payment processor PayPal acquired Braintree, along with Braintree-owned Venmo. Since then the San Francisco-based Braintree has catapulted itself through innovation, APIs and a giant network – curtsey of PayPal – to the front of the payments stage.
But while Braintree has benefited tremendously from its PayPal purchase, Juan Benitez, General Manager at Braintree told Bank Innovation that PayPal too has gained a lot from the deal.
For one, Braintree is the primary method for integrating merchants with PayPal.
“Brain tree has been able to bring a dimension of technology and products to PayPal,” he said.
One of those technologies is the PayPal One Touch solution. That product alone has greatly improved the rate at which consumers can make purchases from merchants.
But Braintree’s focus hasn’t changed since its establishment in 2007, Benitez said.
“We have always focused on mobile payments,” he said. “Our acquisition of Venmo, and then PayPal’s acquisition of us, fits in with this goal.”
Now that goal is narrowed on expanding solutions that can sustain the growing numbers of users on the both consumer and merchant front, he said.
“As PayPal becomes more and more powerful, the emphasis is scale and trajectory,” he said. “How we can help power our merchants’ source of revenue, while sustaining the large scale of users and protecting data.”
Digital wallets is an obvious area of interest for Braintree, with more and more merchants powering wallets other than PayPal.
“That’s one area of past and current innovation,” he said “We have to help our merchants deal with the proliferation of mobile wallets. Over the past years we’ve seen many wallets on the scene.”
To support this phenomenon, Braintree has built a platform using its API in which merchants can add “relevant wallets” to the platform without having to recode anything on the server side.
“This lets us serve every wallet that is acceptable in our platform such as Apple Pay or Android Pay,” he said.
Those acceptable wallets are defined by utility, scale and experience. Other examples include Samsung Pay and Masterpass.
Contextual commerce is another area of opportunity for Braintree, Benitez said.
“The ongoing notion is that merchants won’t always interact with consumers through their website,” he said. “And we want to be at the forefront of facilitating that. For example, we want to help buyers on Facebook Messenger book an Uber ride without having to go into the app.”
When it comes to Venmo, there is talk that PayPal will use Venmo’s social media aspect to create an opportunity for merchants to interact with their customers.
“Right now, we have the plumbing of the payments system, now we want to help merchants connect with consumers.”
Expansion in more markets is also on the list for Braintree.
“This is an ongoing area of focus,” he said. “Braintree is in 46 markets globally, but PayPal has tremendous global reach whether with issuing banks or card networks, and we want to grow in new markets where they have that reach.”
He declined to name specific markets.
Founded in 2007, Braintree is a platform that powers mobile and online payments for commerce entities through a combination of technology, customer service and support.
Some of their major customers include Uber and Airbnb. More recently on Monday, BrainTree struck a deal with Eventbrite, making the purchase of tickets on the Facebook platform contextual, meaning users wont be redirected to the respective event holder’s page.
“Braintree and PayPal will continue to have a global presence, we are just scratching the surface,” he said. “Merchants are looking to power their platforms globally and with the rails we have we can provide interesting optimization. There’s a lot more to come.”
PayPal, which trades on Nasdaq under the symbol PYPL, has a market capitalization of $76.7 billion. The Palo Alto-based company has posted consistent revenue growth since going public. For the fiscal year 2017, it expects its revenue to grow 18 – 19% at current spot rates and 19 – 20% on an FX-neutral basis, to a range of $12.775 to $12.875 billion.