On September 26, 2013, eBay announced that its PayPal business would acquire Braintree for approximately $800 million in cash. The transaction closed on December 19, 2013, putting Braintree’s developer-focused payments platform and Venmo inside PayPal. It was a strategic bet on mobile commerce, startup distribution and payment infrastructure—not simply another consumer-wallet acquisition.
The headline’s “win for PayPal” is an interpretation rather than a measurable fact. The deal added valuable technology, customers and talent, but payment volume was not the same as revenue, and eBay’s later accounting reported a different total-consideration figure.
What eBay actually bought
Legally, eBay was the acquiring parent; operationally, Braintree joined PayPal. Braintree provided APIs, software-development kits and gateway services that let online and mobile businesses accept cards and other payment methods inside their own branded experiences. A shopper could pay without seeing a prominent PayPal button.
That made Braintree different from PayPal’s consumer-facing wallet. A wallet mediates a customer’s payment credentials and identity. A gateway routes transaction data between a merchant, payment processors and financial networks. Braintree combined gateway and merchant-integration capabilities in a developer-oriented platform.
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minute#1 Best Overall
- With Square Terminal, you can ring up sales, accept payments, and print receipts, all with one device. Use it at the counter or ring up customers anywhere in your store.
- Accept all major credit and debit cards and pay one low rate with no hidden fees and no long-term contracts.
- Process chip cards in just two seconds.
- Get your money as soon as the next business day.
- Use it cordlessly with the built-in battery, designed to last all day.
In its announcement, eBay described Braintree as serving companies including Airbnb, OpenTable, TaskRabbit, Uber, Fab and LivingSocial. The release said the platform operated in more than 40 countries, supported more than 130 currencies and was expected to process approximately $12 billion in payment volume in 2013. Those were company-provided operating figures, not revenue figures. eBay’s September 26, 2013 announcement
Why PayPal wanted Braintree
Access to developers and startups
PayPal had broad consumer recognition, but many mobile-first companies wanted programmable payments that could be embedded in an app or custom checkout. Braintree’s relationships with fast-growing startups gave PayPal distribution among the businesses building new commerce categories.
A stronger mobile position
eBay said roughly one-third of Braintree’s projected 2013 payment volume was expected to come from mobile payments, while PayPal projected more than $20 billion in mobile-payment volume for 2013. The acquisition therefore promised complementary mobile capabilities rather than just additional traditional checkout volume. eBay’s acquisition announcement
Rank #2
- Use the, easy-to-use, and customizable POS to get started.
- Accept contactless payments, chip cards, Apple Pay, and Google Pay from anywhere, with improved connectivity, extended battery life, and enhanced security. Pay one low rate for every tap or dip.
- No long-term commitments or contracts, no monthly fees- and with offline payments, keep taking payments for up to 24 hours.
- Safely and securely accepts payments anywhere. Plus, get data security, 24/7 fraud prevention, and payment-dispute management at no extra cost.
- Use the, easy-to-use, and customizable POS to get started.
Venmo
Braintree had acquired Venmo before the eBay transaction, so Venmo came with the deal. Venmo offered a mobile, social-oriented peer-to-peer payments product that PayPal did not have to build from scratch. The closing release said Venmo would remain a separate app while contributing to PayPal’s mobile strategy. eBay’s December 19, 2013 completion announcement
Talent and technology
eBay and PayPal said Braintree would bring complementary technology and talent, improve support for developers and entrepreneurs, and gain resources and global scale. Bill Ready remained Braintree’s chief executive and joined PayPal’s executive staff, while Braintree continued as a separate service within PayPal. These were management’s stated objectives, not guaranteed outcomes.
The numbers behind the $800 million headline
| Figure | What it means |
|---|---|
| Approximately $800 million | Cash consideration used in eBay’s September 2013 acquisition announcement. |
| Approximately $12 billion | Braintree’s projected 2013 payment volume, according to the announcement; volume is not revenue. |
| About one-third | Projected share of Braintree’s 2013 volume from mobile payments. |
| Approximately $713 million | Total consideration reported later in eBay’s 2013 Form 10-K purchase-accounting disclosure. |
| Approximately $590 million | Goodwill recorded in that filing. |
| Approximately $155 million | Acquired intangible assets recorded in that filing. |
The $800 million and $713 million figures are not necessarily contradictory. The first was the announced cash price; the second was eBay’s later accounting measure of total consideration after the transaction was recorded. They should not be presented as interchangeable or used to imply that one is the only “real” price. eBay’s 2013 Form 10-K, Note 3
Rank #3
- Get your money as soon as the next business day.
- Get set up quickly with no long-term commitments. Download the Square Point of Sale app for free, create an account, and start taking payments anywhere.
- Run your business all in one place with the free Square Point of Sale app. Track your sales, manage inventory, accept tips, send receipts digitally, and more.
- Works with Apple devices with a Lightning connector.
Nor did $12 billion of payment volume automatically add $12 billion to PayPal’s reported volume. eBay warned that definitional differences meant a significant portion of Braintree’s volume would be treated like PayPal’s gateway business, with revenue recorded rather than the full payment volume counted in the same way. Payment volume, revenue and profit are separate measures.
Why commentators called it a PayPal win
The bullish case was that PayPal was buying strategic position in the infrastructure layer of digital commerce. Braintree could supply:
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
- Developer relationships and APIs for mobile-first businesses.
- Exposure to startups likely to become large commerce platforms.
- Mobile checkout and gateway expertise.
- Venmo’s peer-to-peer network and mobile product.
- Experienced employees and a management team that initially stayed in place.
Keeping Braintree as a separate service also offered a way to add PayPal’s capital, compliance resources and international reach without immediately replacing the developer-oriented product with a conventional PayPal-branded checkout.
Rank #4
- Pay one transparent rate per swipe for Visa, Mastercard, Discover and American Express.
- Works in conjunction with most downloadable Square point-of-sale apps on your device. Customers can pay, tip and sign directly on your device. Track payments in cash, gift cards and more. Also lets you send receipts via e-mail or text message, makes it easy to apply discounts, keeps a data and sales history log and more.
- Accepts magstripe credit card payments, including those from Visa, Mastercard, Discover and American Express (fees apply).
- App sends deposits to your bank account within 1 to 2 business days, or enjoy instant deposits (fees apply).
Why the “win” thesis needed limits
Scale could weaken independence
Braintree’s appeal to startups depended partly on speed and a developer-first culture. Ownership by a large incumbent created the risk that legacy processes, product priorities or branding would make the service less attractive to the very customers PayPal wanted.
Volume could be overstated
The projected $12 billion figure described transactions routed through the platform, not sales or earnings. Some volume overlapped with categories PayPal already reported, so the acquisition did not guarantee equivalent incremental growth.
Integration and regulatory execution mattered
Payments businesses require merchant underwriting, licensing, security, dispute handling and regional compliance. eBay’s announcement identified regulatory approvals, customer reaction, competitive responses and integration as risks. A high purchase price alone could not prove that the strategic benefits would materialize. eBay’s risk disclosures
Recommended Free Tools
Best Value
- Accept all major credit and debit cards and pay one low rate
- No hidden fees and no long-term contracts
- Mobile card reader that accepts payments anywhere & anytime
- Use the free SumUp App on your smartphone or tablet to start accepting transactions
- Simply pay 2.6% +10 per in-person transaction
Success depends on the metric
The acquisition can look successful if the measure is developer reach, mobile capability or access to Venmo. It is a different question if the measure is near-term incremental revenue, reported payment volume or return on the purchase price. The transaction documents do not establish one universal verdict.
What happened to the corporate relationship
Braintree became a separate service within PayPal after the December 2013 closing, and Venmo remained a separate app. The corporate structure later changed: eBay and PayPal announced a separation, completed in 2015, creating independent companies. Thus, PayPal was eBay’s payments business when Braintree was acquired, but it is not an eBay division today. SEC PayPal separation information statement
How to read the deal today
The acquisition is best understood as PayPal moving beyond a visible checkout button toward the less visible infrastructure that powers apps, marketplaces and emerging online businesses. Braintree supplied APIs, merchant relationships, mobile expertise and Venmo; PayPal supplied scale and resources. Whether that combination was worth the price cannot be answered by the $800 million headline or the $12 billion volume figure alone.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
