One billion served.
Long ago a milestone for a certain purveyor of burgers, a new one for a certain payments processor in Q2. That’s Braintree, the PayPal subsidiary, of course, which this past month announced the news that it has hit the threshold of processing more than 1 billion transactions per quarter – including PayPal and gateway transactions.
All numbers tell a story – and this one number in particular, one billion, prompted us to ask Braintree GM, Juan Benitez, to take us inside that billion transaction journey. Along the way, we discovered five things that you probably didn’t know you didn’t know about Braintree’s platform roots. Here they are.
Of Billions And The Big Leagues
What’s a payments company without scale? The quick answer is: small. But Benitez said that Braintree’s Q2 billion transactions headline should be taken in the context of some other recent news in the payments firmament, also starting with capital “Bs.”
Take, for instance, the executive said, larger players (among them names like Worldpay) that have gotten up to four to five billion in annual eCommerce transactions. That’s a benchmark that Juan Benitez said shakes out to roughly the same annual transaction volume levels of Braintree. But with one big difference, he told Webster. Braintree’s threshold was crossed just four years after the company was acquired by PayPal.
“I think the billion number is a pretty darn good one,” he told Webster.
But it’s not the only number that matters.
Benitez said that Braintree had 520 million vaulted cards on file (about 1.5 for every individual in the United States) at the end of the second quarter, and PayPal has 210 million active accounts. Add to that the huge number of consumers who touch PayPal through the global online payments system One Touch and other digital banking conduits, and the figures get even more eye-popping.
More Than Payments Plumbing
Of course, making it easy for developers to enable payments — all types of payments — on their websites and in their mobile payment apps is what you’d expect Braintree to be in the business of doing. And, while abstracting payments is table stakes today for payments platforms, Benitez said, it’s been Braintree’s MO for more than five years.
Braintree anticipated the growing number of online payments methods and “Pays” and adapted its platform so that developers could bypass the complicated integrations to each one of them by simply tapping into Braintree’s API. The more payment options in the mix, the more robust the apps in place, the less friction the consumer experiences, Benitez emphasized.
But Benitez was also quick to point out that Braintree has PayPal’s two-sided network as a powerful arrow in its payments quiver. When Braintree enables PayPal as part of the developer’s payments mix, it brings along with it the 210 million PayPal account holders who are among the most active eCommerce transacters on the web (and on mobile). Benitez said that capability changes the mindset about payments — before it has always been a utility, but now payments can be thought of as a strategic weapon. A strategic weapon that Benitez said doesn’t just power the business — but that can grow the business, too.
Mobile Before Mobile Was The Payments “It” Girl
Mobile is where payments is moving — but not that long ago, it was a concept that was regarded by some as still a bit bleeding edge.
Five years ago — a lifetime in the wireless world — the company debuted its mobile SDK, something that Benitez said was the first of its kind. The GM told Webster that it was always Braintree’s goal to make investments that drove scale in the game called mobile before others had even recognized that players had taken the field. And recognizing that the mobile game would soon play to capacity crowds, Braintree drafted a key player to the game when they bought Venmo.
Benitez said that it was an example of the kind of synergy where “one plus one equals more than two” — and sometimes gets to three. PayPal One Touch was fashioned from Venmo Touch, a product that had been created in 2013 in the aftermath of the Braintree/Venmo deal. Benitez explained that Venmo’s one touch functionality eliminated the need for re-keying in data, a crucial effort in mobile digital banking, and would become a staple across all the company’s platforms, including PayPal. One Touch, as Benitez noted, has made mobile transactions easier and more intuitive, which translates into higher conversion rates.
Adding Context To Commerce
Braintree has always placed a priority on giving developers the tools they need to easily and efficiently offer the payments mix that their customers want — and that support the use cases that make for an amazing customer experience on a mobile device. That, Benitez said, led Braintree to give developers tools that would allow mobile users to buy something “in the moment,” beyond a merchant’s website.
Benitez said that the ability to book an Uber inside Facebook Messenger inside another app or ecosystem improves conversions — and is made possible because Braintree has placed a high priority on creating a platform, along with access to vaulted card credentials, that allows developers to bypass the complicated integrations that they’d otherwise have to do.
Benitez pointed to Skyscanner, a travel aggregation site that saw a boost in its conversion rates just by making it possible to leverage its platform to book travel directly on its website instead of having to punch out to an airline website and enter payment credentials. Skyscanner reported an 100 percent boost in ancillary purchases and a 50 percent boost in mobile conversions.
“We are trying to build these platforms that people can use in ways ... [they] never thought of,” said Benitez.
Eating Its Own Dog Food
In order to build out technologies, strategic alignment is important, said Benitez, adding that when a new merchant wants to integrate with PayPal, Braintree’s platform is the default integration for them to get it. That fundamental alignment comes with the delivery of Venmo, PayPal Credit and other PayPal capabilities — and, Benitez said, speaks to the ease of one integration across payment methods.
Benitez emphasized that PayPal’s ambition is to become the one platform that powers everything a merchant needs — and that Braintree wants to help enable that vision for PayPal.
“We recognize that it’s critical for us to power all the basics of payments,” Benitez explained. “PayPal has unmatched global rails and scale,” with partnerships across card networks for issuing banks and the major issuers.
And, in the end, being there first — and being there quietly — can help pay dividends, as Benitez said that Braintree has shown.
In fact, sometimes you may even hit a billion before anybody knows it.