Earlier today, Braintree announced its new Marketplace product which allows marketplace and sharing economy operators like AirBnB, HotelTonight, and TaskRabbit to offload the burden of managing payouts, taxes, compliance, chargebacks, and all the other hassles of operating a marketplace. Other coverage has centered around features and functionality of the product. While interesting, that completely misses its most transformative aspect of the launch: Braintree is enabling marketplaces to offer an end-to-end mobile experience.
For the last year plus, consumers have had access to numerous mobile-friendly payment options, most notably Braintree-owned Venmo Touch, which make entering credit card details on a cramped mobile keyboard a relic of an era gone by. But sellers were typically left out in the cold. Want to sign up as a TaskRabbit or list your property on AirBnB? Not only should you find yourself a full sized keyboard to enter in your bank account info and mailing address, but you may need to dig out your checkbook to find that information in the first place. Not exactly conducive to what should be inherently mobile experiences.
Braintree’s platform makes it so that sellers can sign up simply by entering their mobile phone number. Really. That’s it. Type in your ten digit mobile phone number and you’re set to start receiving payments, which incidentally are available within 24 hours if processed through Venmo or within 48 hours when sent by ACH transfer. This is a marked improvement from the standard five to seven days it took to receive payment with legacy solutions.
The company announced TaskRabbit as its launch partner today, and said numerous other clients have already adopted its Marketplace product.
Now, with the end-to-end Braintree experience, a TaskRabit transaction is as simple as the buyer placing an order via their mobile phone, and the service provider doing the same to accept. Once the buyer clicks to send payment through Venmo, TaskRabbit’s 15 percent commission for facilitating the match is sent directly to its bank account, while the balance is sent directly to the service provider either through Venmo or ACH transfer. It’s worth repeating because it’s so different from how we buy things online today: At no point did anyone involved need a credit card, a checkbook, a payment terminal, or a laptop or desktop, and TaskRabbit never touched the seller’s funds.
Braintree CEO Bill Ready says that Marketplace grew out of feedback received from the company’s existing sharing economy clients. He says:
This was one of the number one pain points that our clients described to us. We’ve always done well in the marketplace category, but there are a lot more companies that we’d like to work with. There may even be some marketplaces formed as a result of the Braintree Marketplace product. It’s similar to how Amazon Web Services makes it so much easier to create startups today without having to invest in servers.
Braintree Marketplace is free to use, with companies only paying the standard $0.30 plus 2.9 percent fee on each payment processed – something Ready says his company has no plans to change in the future.
Given the slug-fest in payments and the explosion of mobile commerce going on, the big question is how quickly Braintree’s competitors can duplicate this offering. Ready argues that merchant-side-only players – like Stripe and Balanced – don’t have the consumer facing app or database of payment information that Braintree does, which is necessary to remove the checkout friction as described above.
PayPal has a larger consumer and merchant footprint than even Braintree, but has not earned many fans over the last decade thanks to its byzantine risk mitigation policies and poor customer service. To the company’s credit, new CEO David Marcus is in the early stages of a major turnaround effort and the perceptions of the still-category-leader could change quickly. If they do, PayPal certainly has an advantage over everyone. Braintree (and Stripe and Balanced) are wise to make hay in the meantime.
For all payment vendors time is of the essence. Commerce is going mobile at an increasingly rapid clip. After a decade of online commerce, mobile is the new battleground, and it’s moving faster than anyone could have expected a few years ago.
As a consumer who fantasizes about the day when I can ditch my wallet, my laptop, my keys, and all other must-carry items altogether and rely entirely on my smartphone, this is a welcome sight. I like the future that Braintree is creating and if PayPal, Stripe, and others push in that direction too, so much the better.
[Image courtesy iStockphoto]