In buying Venmo for $26.2 million, Braintree Inc. plans to bring its one-click shopping experience to the startup's mobile wallet.
An improved Venmo mobile-payment application will make it easier for consumers to make purchases on their mobile device and simpler for e-commerce companies to accept payments on mobile devices, Bill Ready, Braintree CEO, said in an interview.
"Consumers want to shop on their mobile device, but they're encountering merchant [sites that aren't easily maneuverable], and that can make it difficult," he says. "Now they'll be able to do one-click shopping with their mobile device and across any number of merchants."
Mobile devices now initiate more than 20% of e-commerce sessions, and that is creating problems for online merchants not ready to accommodate mobile traffic, he says. The addition of Venmo will help consumers and merchants improve that experience, Braintree says.
"We've taken the tools … of large e-commerce companies … and made them available to all e-commerce companies so they can have better conversion rates at checkout," Ready says.
Braintree will roll out new products over time with the help of Venmo's expertise on the consumer side of the payments equation. "You will see over time products geared toward creating great seamless mobile-payment experiences," Ready says.
Braintree says it handles about $1 billion in mobile payments, representing 10% of all mobile commerce transactions.
Consumers who have stored their payment card information at one of the thousands of online and mobile applications that use Braintree soon will be able to use the Venmo digital wallet to pay merchants in just one click. Braintree powers payments for such online and mobile merchants as Rovio/Angry Birds, Uber, Airbnb, HotelTonight and OpenTable.
Braintree charges as its standard rate 2.9% of the sale plus 30 cents, but the margin is just a few basis points after paying issuer card-not-present interchange, Ready says. Larger merchants get custom pricing, he adds.
Chicago-based Braintree says it doesn't plan to relocate Venmo's New York-based operations.