PayPal's David Marcus: Braintree Keeps Its Brand And Ops Intact; Venmo Will Be Used For Big P2P Push
Today's news that eBay's PayPal is buying Braintree for $800 million in cash will open the door to Braintree taking its developer-focused payments platform to more markets and with more services.
Context & Ripple Effects
Braintree entered the deal with Venmo already in hand through its 2012 purchase of the person-to-person payments app. By September 2013, it had also held acquisition discussions with both Square and PayPal, making PayPal’s agreement the resolution of a visible contest for a developer-oriented payments business.
PayPal says Braintree will retain its brand and operating structure while gaining access to more markets and services. Pairing that autonomy with a major Venmo push gives PayPal both a developer-facing platform and a consumer P2P product.
First-order effects
- Braintree keeps its brand and operations intact inside PayPal, while its developer-focused payments platform gains PayPal’s market reach and service portfolio.
- Venmo becomes PayPal’s vehicle for a larger person-to-person payments push, elevating an asset Braintree acquired in 2012.
Second-order effects
- Square loses Braintree as a possible acquisition target and must compete against a developer-payments business backed by PayPal’s resources.
- PayPal can address merchants through Braintree’s developer platform while pursuing consumer payment activity through Venmo, broadening the company’s routes into mobile payments.
Third-order effects
- The transaction points to payments incumbents assembling complementary developer and consumer products rather than relying on a single branded checkout service.
- If Braintree’s operational independence holds, acquisitions may become a way for large payments companies to add product cultures and distribution channels without immediately subsuming them.
The trend: Payments platforms are combining developer-first infrastructure with consumer P2P products to expand beyond their original checkout businesses.