By Shad Bookout
With mobile payments slated to top $1 billion dollars this year, eBay (Nasdaq:EBAY) took another step forward in keeping PayPal as a leading source for mobile payments. EBay acquired payment platform Braintree, which processes over $10 billion a year in mobile payments for mobile purchasing apps such as Living Social, Uber and Fab for $800 million.
This is "a very significant deal for mobile payments," Rick Oglesby, a senior analyst at Aite Group, told Mobile Commerce Daily.
EBay is banking on Braintree's technology base, including offline payments and person-to-person payments, to bolster its mobile app. "We believe that PayPal's scale and global payments expertise, combined with Braintree's highly innovative mobile technology, adds up to a compelling combination for developers, merchants and, ultimately, consumers," a PayPal spokesperson told Mobile Commerce Daily.
Usage of mobile payment systems has slowed recently due to delays, system adoption challenges and a glut of new competition. However, PayPal is the preferred service for many users, and the acquisition should strengthen its market share.
EBay expects to generate $20 billion in mobile commerce transactions for eBay and another $20 billion in mobile payments transactions via PayPal this year.