Consumers are making payments on their tablets and smartphones more than ever and eBay is targeting this area of expansion. So, this is the reason behind eBay buying Braintree, the online payment firm for a cool £5,000 million.
PayPal dominates the world of online payment platforms, but that’s not to say that it doesn’t face fierce competition from firms such as Braintree. So, it makes perfect sense for eBay to buy up the company along with its Venmo online payment app for smart devices.
Currently, eBay gets around 40% of its revenues from PayPal and its 120 million users. Purchasing Braintree is a strategy that will simultaneously remove a competitor whilst expanding PayPal’s distribution. The acquisition of the Chicago based firm is scheduled to be completed by the end of the year. So, we are already wondering what 2014 will hold in store for eBay.
More acquisitions from eBay? "Anything's possible"
When asked about this latest purchase, eBay’s vice president of global product, Hill Ferguson said he was keen to pursue more acquisitions. What else will eBay do to boost PayPal mobile offerings? Well, according to Hill Ferguson, "Anything's possible".
Mobile sales are big business and PayPal bought mobile app developer, Duff Research, earlier this year (2013), to expand its expertise in this area. Purchases made over mobile devices will continue to grow. According to research firm IDC, worldwide sales on these devices are set to exceed £6bn by 2017.
PayPal has already released an app for UK consumers, which allows customers to make purchases on their mobiles using their name and a picture of their face. The app identifies restaurants and shops that accept PayPal and the customer can then click on the retailer to “check in”.
So, it looks as though there are going to be some interesting developments in the immediate future. The way we shop is changing and eBay plans to stay ahead of the game.
