GoingGlobal

Braintree CEO Bill Ready envisions a future where mobile devices aren’t just the first computing devices we reach for, they are the only ones. And that future is surely not limited to the United States. Which is why it makes sense that Ready is adamant about expanding Braintree and its Venmo one-touch mobile payment platform into as many global markets as possible.

Today, Braintree announced that it is making Venmo available to residents of the United Kingdom, with Europe and then other global markets expected to follow shortly. The company is also announcing an exclusive marketing partnership with American Express in the UK, through which its cardmembers will get targeted promotions and incentives to sign up for the Venmo platform and make their AMEX the default payment card when doing so.

The AMEX tie up presents an interesting opportunity for Braintree to move beyond its typical “urban, affluent, early adopter” audience as described by Ready. AMEX cardmembers presumably skew slightly older and more affluent than even Braintree’s existing partners like Uber, TaskRabbit, and online bank Simple. If the company can corral this elite crowd, then it could be a massive win in terms of average spending per user.

Braintree has more than 40 million one-touch mobile payment customers globally, and processes more than $4 billion worth of mobile payments annually (out of its more than $12 billion in total payments processed). This figure makes Braintree the undisputed king of mobile payments, with Ready estimating that the closest competitor is less than 10 percent its size in terms of payments processed.

With Simple and now AMEX on board as preferred marketing partners in the US and UK, expect Braintree to follow a similar playbook in future markets. There also could be some significant competition in these initial two markets from other payment card companies (Visa, Mastercard, Discover, etc.) seeking to get their cards installed into Venmo’s valuable default payment card real estate. While Ready declined to reveal details of the AMEX partnership, he did confirm that no money would be changing hands between the two companies, calling it a strategic relationship that makes sense for both parties without any additional compensation.

Of course, the big news with Braintree of late is its pending acquisition by PayPal, regulatory approval permitting. Although unexpected, the tie-up would only further-strengthen the company’s stranglehold on the mobile payment market, adding a host of additional financial and technical resources, not to mention global scale.

There’s big risk involved, however. The first is that Braintree could be slowed down or lose its innovative edge as a result of PayPal’s bureaucracy and scale. Secondarily, there’s the prospect that Braintree’s partners and users respond negatively to the partnership, projecting PayPal’s suspect customer service reputation onto the beloved-by-comparison Braintree. Reducing the likelihood that either becomes a major issue for Braintree is the fact that the companies plant to operate independently for the foreseeable future, according to Ready and PayPal President David Marcus.

For consumers, Venmo is all about convenience of use. The mobile payments platform allows consumers to complete one-touch payments at supporting merchants and avoid the unpleasant task of entering payment and billing information ever again.

“I believe that one day, entering your credit card number and billing address to make a purchase will feel as foreign to us all as a green-screen terminal does today,” Ready says.

With mobile and smartphone penetration at an all time high and adoption showing no signs of slowing, this future that Ready envisions could be closer than anyone might imagine. Payments is an industry that benefits so significantly from scale and ubiquity, that there is likely to be one large victor. On the Web, that winner was PayPal. It’s looking more and more like Braintree will ultimately end up owning mobile – making the PayPal acquisition looking increasingly savvy.

We’ll be watching for more aggressive moves like this once the deal actually closes as evidence that Ready means it when he says he’ll continue building out his mission to unite the world with seamless, frictionless mobile payments, just with PayPal’s greater reach and resources. Competitors like Stripe will likewise be looking for Braintree to lose a step once it gets bought.

    1. Accel Partners
      Past Investor
    2. Mike Dudas
      Employee
    3. Chuck Templeton
      Past Investor