Braintree—Growth For PayPal

by Raymond Pucci 0

Braintree has been a home run—actually a Grand Slam—for PayPal. The payments processor and gateway provider was purchased by PayPal in 2013, and has exceeded expectations as the following articles relates.

PayPal earned its fame as the internet’s original electronic payment system for consumers.

But thanks to an acquisition it made three years ago, PayPal is now a contender in one of the fastest-growing and most promising parts of the payments business.

PayPal’s secret weapon is Braintree, a payments startup it bought for $800 million in 2013. The deal gave PayPal vital technology for the back-end payment processing that’s used by a slew of new apps and services, from Uber to Airbnb.
It’s a competitive business, with richly-valued startup Stripe counting an impressive list of its own marquee customers.

But Braintree says it’s seeing robust growth in an important part of its business, providing an important engine for its PayPal parent.

Braintree is doing 3 times as many transactions as it was this time last year, the company tells Business Insider. Assuming the average dollar amount per transaction hasn’t dropped significantly, that increasing usage could help Braintree accelerate the growth in its overall payment volume, which totaled $50 billion in 2015.

No doubt that timing is everything, but it still takes a company with a standout strategy and smart people to execute it. Braintree has been in the epicenter of two seismic trends in the payments world—E-commerce and the sharing economy. E-commerce expands online shopping to cross border and cross currency transactions and the sharing economy requires seamless and integrated payment processing. Braintree’s core strengths as a gateway and processor match exceptionally well in these two markets, as has major competitor Stripe. Follow these two companies’ performance as a good barometer on the direction of key segments of the payments driven economy.


Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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