EBay to acquire Braintree to bolster PayPal
ONLINE auction giant Ebay yesterday revealed it has agreed to buy payments provider Braintree in an acquisition to boost its PayPal offering on smartphones and tablets.
Braintree will be bought for $800m in cash by Ebay in a deal expected to close in late 2013.
“Braintree is a perfect fit with PayPal. 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,” said Ebay chief executive John Donahoe.
PayPal currently deals with $20bn of mobile payments every year, but it has come under competition from payment startups, such as Square, looking to break into the market.
“We believe that this deal makes reasonable sense strategically as it expands PayPal’s distribution and removes a competitor,” RBC Capital Markets analyst Mark Mahaney said.
Braintree currently deals with £12bn of payments each year.