PayPal's Braintree payments platform just announced what could be the next big thing in contextual commerce.
Braintree announced today (Dec. 16) that it is the launch partner of Facebook Messenger's new service through its new Transportation Services division within that platform that will enable users to order and pay for an Uber via Messenger. What this means is that Braintree's tokenization will be used on the backend to process the payments between Messenger and Uber on the platform that enables users to book and pay for an Uber in Messenger, regardless of if they have an Uber account.
"This feature, launching in collaboration with Uber, is just a natural extension of businesses being present and actionable on Facebook Messenger," Juan Benitez, GM at Braintree, explained in a blog post. "This new functionality sits right at the intersection of increased mobile commerce adoption and the rapid growth of on-demand services, and ties the two together to streamline a truly mobile commerce experience."
Another benefit of having Braintree power this payments platform is its ability to have the security capabilities of both platforms to be used in the tokenization and transportation of the payments in order to make this use case possible.
"It's not just that we are using our two-sided network to really reduce friction on mobile, we're also seeing checkout start to move to interesting new places. There's a lot of experimentation of how and where that's going to happen," Braintree's CEO Bill Ready told MPD CEO Karen Webster in an interview.
And he expects this trend to continue in the commerce and payments ecosystem.
"I think you're going to see the same thing with checkout moving outside of the traditional checkout page on a merchant site or even checkout pay in a merchant's app. Or the in-store checkout aisle. The two-sided network as well as our tokenization platform that we've built up over many, many years lets us take friction down as we are doing with One Touch, but also lets us start to allow merchants and consumers to connect in these new contexts in more seamless ways," Ready said.
What's unique in this partnership is the fact that there's a connection between the applications, but also in the payments vehicle that drives that commerce connection. Where Braintree's importance comes into the mix is its ability to underpin the transaction with its tokenization services. That means regardless of where users store their payments (Facebook or Uber), Braintree can make the transaction happen.
The future of contextual commerce, Ready noted, is all about having "more portability of how [consumers] can use your payment credentials," which Braintree plans to be a key enabler of.
"We're enabling a broader set of use cases for these kinds of experiences where you might have payment information [and] checkout capability right now confined to a very specific experience that we are going to broaden," Ready said.
"Whichever side of that your payment instrument is on, we'll consult a transaction seamlessly via our tokenization services so that the user can have a great experience the whole way through, and not have to go re-enter the information or worry about how payment information is facilitated between two different apps. We just make it seamless, regardless of where [the consumer] had provided payment information," he continued.
By Braintree powering the payments vehicle between Uber and Messenger, it allows the tokenized transaction to seamlessly move from one application to the other in a manner that’s authorized by the user, Ready explained. This is the value that PayPal and Braintree bring to the table in this partnership.
"We do feel confident in the blurring of lines of where checkout can happen. We're going to do a lot of things to go enable that. It is the kind of thing that lends itself to our two-sided network. It's not just our tokenization platform. It's the scale that we bring, the number of people we can connect and those kind of things so that we can do that for a large number of users," he said, referencing PayPal's wallet users and the 180 million cards it has on file.
"If you start to think about power of platform, it would be very valuable to be looped into the transaction between the consumer and the merchant. That becomes increasingly more valuable if you're not sure whether or how the consumer and merchant may enable one another. But now, as a merchant, you can't be sure where you are going to encounter your customer. It becomes much more valuable to be on both sides of that network. I think you'll start to see more specifics on how that plays out," Ready said.