PayPal’s September 26, 2013 announcement of an $800 million cash purchase of Braintree was less a hunt for missing payment machinery than an attempt to import a faster, more developer-friendly way of building products. In an interview published that day, PayPal developer-relations chief John Lunn summarized the logic: “we need to be like them.” The transaction was still pending; Lunn said closing was expected in the fourth quarter of 2013.
Lunn’s interview with VentureBeat presents the deal as an organizational and distribution bet. PayPal already offered card processing, mobile payments and related services. Braintree supplied something PayPal believed it was struggling to create internally: a modern developer experience, startup-speed execution and credibility with mobile-first companies.
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The deal PayPal announced
| Item | What was known on September 26, 2013 |
|---|---|
| Buyer | PayPal |
| Target | Braintree, a payments gateway and developer-oriented payments company operating since 2007, according to Lunn |
| Announced price | $800 million in cash |
| Status | Announced, not yet closed; Lunn expected completion in Q4 2013 |
| Stated strategic aim | Accelerate PayPal’s developer platform and make its payment services easier to adopt |
Calling the event an acquisition without that timing qualification is misleading when describing the original interview. It was an announced transaction with important integration decisions still unresolved.
PayPal’s problem was execution, not simply capability
PayPal was already building new application programming interfaces and a new developer website. Lunn’s complaint was that a large-company process was moving too slowly. The gap was therefore not a list of payment functions PayPal lacked; it was the speed, usability, documentation, support and product momentum developers experienced when trying to use those functions.
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That distinction explains the unusually self-critical rationale. PayPal saw Braintree as faster and more appealing to developers, and wanted to learn from its operating model rather than merely add another processing endpoint.
What Braintree offered PayPal
A developer-facing product
Payment infrastructure is chosen by engineers long before a consumer sees a checkout button. Developers select an API, embed it in an app or marketplace, and influence which provider a growing business continues to use. Braintree’s appeal was that it presented payments in a form mobile and web developers could adopt more easily than PayPal’s legacy experience.
Mobile and marketplace relevance
Lunn described Braintree as having interesting mobile products, marketplace technology and relationships with prominent mobile startups. Those descriptions are PayPal’s rationale, not an independently measured ranking of Braintree’s customers or technology. They show why PayPal connected the deal to the coming shift toward app-based and marketplace commerce.
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- When you access your Visa Virtual eGift Card for the first time, you’ll need to register your name, address, phone number, and email address via activationspot.com. These details should also be used as your billing address for online purchases, as many merchants require address verification for purchase authorization.
- This Visa Virtual eGift Card is non-reloadable. No cash or ATM access. Visa Virtual eGift Cards are emailed active.
- Funds do not expire but your Visa Virtual eGift Card has a ‘valid thru’ date (9 years from date of purchase). If funds remain after this date has passed, please call the Toll Free number found on your Visa Virtual eGift Card for a replacement card. A one-time purchase fee applies at the time of checkout.
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People, culture and support
Lunn emphasized Braintree’s “startup spirit,” hunger and appetite for change, along with what he characterized as strong customer support. The strategic asset was consequently broader than source code: it included people, customer relationships, decision-making habits and the trust Braintree had built with technology companies.
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The intended integration model was deliberately unusual
PayPal did not present a plan to fold Braintree into existing PayPal teams. Lunn said Braintree should remain Braintree and operate as a standalone company. He warned that absorbing its teams into PayPal could be “disastrous” because it might destroy the speed and culture PayPal was paying to obtain.
The proposed mechanism was to let Braintree serve as the developer-facing platform through which PayPal services could be offered. In theory, PayPal would contribute scale, payment infrastructure and resources while Braintree preserved its product cadence and customer approach.
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- Visa Virtual eGift Cards are designed for online use only. Gift Cards are subject to Terms and Conditions: a.co/5bw3qXJ
- When you access your Visa Virtual eGift Card for the first time, you’ll need to register your name, address, phone number, and email address via activationspot.com. These details should also be used as your billing address for online purchases, as many merchants require address verification for purchase authorization.
- This Visa Virtual eGift Card is non-reloadable. No cash or ATM access. Visa Virtual eGift Cards are emailed active.
- Funds do not expire but your Visa Virtual eGift Card has a ‘valid thru’ date (9 years from date of purchase). If funds remain after this date has passed, please call the Toll Free number found on your Visa Virtual eGift Card for a replacement card. A one-time purchase fee applies at the time of checkout.
- This item is not eligible for refund, resale, or return. Available for sale within the United States only. Not available to residents of Puerto Rico, Hawaii, New Mexico, South Dakota, West Virginia and the US Virgin Islands.
Why autonomy mattered
- Speed: An independent team could continue releasing products without adopting every large-company approval process.
- Trust: Developers could keep dealing with a focused payments company rather than an apparently rebuilt legacy platform.
- Distribution: PayPal could reach startups and marketplace businesses through a platform those companies already understood.
This was not a promise that the companies had solved integration. It was a recognition that integration itself could destroy the acquisition’s central value.
What remained undecided
Overlapping products
At interview time, PayPal said existing PayPal and Braintree solutions would continue separately. Lunn said the companies would later determine how to evolve overlapping products and combine the best of both offerings. The interview did not establish a final API, branding or migration roadmap.
Venmo Touch
The discussion of Venmo Touch illustrates that uncertainty. Asked whether PayPal would become one of the available payment options, Lunn said detailed product decisions had not yet been announced because the transaction was pending. Venmo Touch was evidence of Braintree’s mobile capabilities, not a disclosed blueprint for post-deal integration.
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- Visa Virtual eGift Cards are designed for online use only. Gift Cards are subject to Terms and Conditions: a.co/5bw3qXJ
- When you access your Visa Virtual eGift Card for the first time, you’ll need to register your name, address, phone number, and email address via activationspot.com. These details should also be used as your billing address for online purchases, as many merchants require address verification for purchase authorization.
- This Visa Virtual eGift Card is non-reloadable. No cash or ATM access. Visa Virtual eGift Cards are emailed active.
- Funds do not expire but your Visa Virtual eGift Card has a ‘valid thru’ date (9 years from date of purchase). If funds remain after this date has passed, please call the Toll Free number found on your Visa Virtual eGift Card for a replacement card. A one-time purchase fee applies at the time of checkout.
- This item is not eligible for refund, resale, or return. Available for sale within the United States only. Not available to residents of Puerto Rico, Hawaii, New Mexico, South Dakota, West Virginia and the US Virgin Islands.
Why Braintree, rather than simply rebuilding PayPal?
Lunn’s answer was primarily about fit. Both companies emphasized mobile payments; Braintree had attracted high-profile technology startups; and PayPal believed its people and culture were compatible. Buying Braintree offered an immediate developer relationship and an operating model that PayPal’s internal modernization effort had not reproduced quickly enough.
That does not prove Braintree was objectively superior to every competitor. It records management’s judgment that Braintree was the right cultural and strategic match for PayPal’s developer ambitions.
The competitive question
The acquisition also raised concerns about concentration in online payments. Lunn rejected the description of PayPal as a monopoly, arguing that PayPal processed a substantial share of internet payments but was not the majority provider and still faced card networks, banks and other payment companies.
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- Visa Virtual eGift Cards are designed for online use only. Gift Cards are subject to Terms and Conditions: a.co/5bw3qXJ
- When you access your Visa Virtual eGift Card for the first time, you’ll need to register your name, address, phone number, and email address via activationspot.com. These details should also be used as your billing address for online purchases, as many merchants require address verification for purchase authorization.
- This Visa Virtual eGift Card is non-reloadable. No cash or ATM access. Visa Virtual eGift Cards are emailed active.
- Funds do not expire but your Visa Virtual eGift Card has a ‘valid thru’ date (9 years from date of purchase). If funds remain after this date has passed, please call the Toll Free number found on your Visa Virtual eGift Card for a replacement card. A one-time purchase fee applies at the time of checkout.
- This item is not eligible for refund, resale, or return. Available for sale within the United States only. Not available to residents of Puerto Rico, Hawaii, New Mexico, South Dakota, West Virginia and the US Virgin Islands.
That was an executive defense, not an independent market-definition analysis. The unresolved issue was whether owning a developer-oriented gateway increased PayPal’s leverage over the infrastructure used by online and mobile businesses, even if consumers could still pay through many competing networks.
The strategic risks PayPal was accepting
- Loss of autonomy: Braintree could be pulled into slower release and approval processes.
- Confusing overlap: Duplicate products or inconsistent documentation could make migration harder for merchants and developers.
- Trust erosion: Developers might value Braintree partly because it was not PayPal, making PayPal ownership itself a liability.
- Surface-level modernization: New branding or APIs would not automatically fix older policies, systems or support practices.
- Conflicting success measures: Payment volume could rise while developer satisfaction and platform adoption deteriorated.
These are implications of the announced strategy, not documented post-acquisition outcomes in the 2013 interview.
What PayPal was really buying
The clearest reading of the announcement is that PayPal was buying a developer distribution layer and an organizational counterweight to its own scale. Braintree brought a mobile-first customer base, marketplace experience, a faster product cadence and credibility among engineers. PayPal brought infrastructure and reach.
The bet would work only if PayPal could expose those capabilities through Braintree without imposing the processes that made Braintree attractive. “We need to be like them” was therefore a statement about how PayPal needed to operate, not merely which payment features it needed to own.
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