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PayPal Inc., the financial services arm of marketplace eBay Inc., continues to work on expanding PayPal acceptance beyond e-commerce, and its decision last month to buy Braintree Payment Solutions LLC for $800 million is one part of that effort, eBay executives said Wednesday.
EBay has been expanding the number of PayPal-accepting brick-and-mortar locations and aggressively pursuing mobile commerce and mobile payments. “We are continuing to move ahead on what we said earlier this year,” John Donahoe, eBay’s chief executive, told analysts during a conference call. EBay wants to make PayPal acceptance as ubiquitous as possible, he said.
As part of that effort, eBay has deals with payment providers such as Discover Financial Services and Alliance Data Systems Corp. for them to offer in-store PayPal acceptance. “We’re trying to work with merchant acquirers,” Donahoe said. “We’re continuing to make progress in doing that.”
Not all payment providers have been eager to add in-store PayPal acceptance. In April, processor First Data Corp. issued a bulletin that it would not support PayPal acceptance. First Data says nothing has changed. “We do not currently support these transactions,” a spokeswoman says. “We’re continually working with our network partners to evaluate the value of enabling new payment functionality for our merchant and financial institution customers and their consumers. Ultimately, our decision will be guided by what\'s in the best interest of our customers—financial institutions and merchants. We haven\'t reached that conclusion yet— that this is in the best interest of our customers.”
San Jose, Calif.-based eBay, however, is not concentrating solely on stores for this expansion. It bought Braintree, a Chicago-based online payment provider to help expand its mobile payment and mobile commerce presence. Donahoe said Braintree helps PayPal in a couple of ways. One is by gaining access to Braintree’s software developer community, he said. The other is that Braintree is the payment provider for companies like Airbnb, OpenTable, Uber and TaskRabbit, all fast-growing e-commerce merchants. Braintree will process about $12 billion in payment volume in 2013.
PayPal’s mobile payment program received a boost in the quarter with a revised smart phone app that now can show consumers which nearby merchants accept PayPal, Donahoe said. Other features of the app are also in testing, he said. “We’re working on order ahead and the ability to pay at the table without having to wait for a check.” PayPal expects to log $20 billion in mobile payments volume in 2013.
