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The inside story of PayPal's One Touch: Bill Ready's bet-the-company, six-year battle to make you spend more money

By Dennis Keohane , written on May 1, 2015

From The News Desk

On Tuesday, PayPal officially launched "One Touch For Web." The new service, an update of the mobile version of the One Touch e-commerce product that the company launched last August, allows consumers to buy items or services through mobile devices or on a desktop without having to enter user names or passwords, shipping information, or payment details. Once a PayPal users signs into PayPal One Touch on their phone, tablet, or computer, the information is linked to that device allowing for the more streamlined shopping experience.

The company claims impressive results from its mobile One Touch product, which is used by companies like Lyft, Airbnb, StubHub. According to PayPal senior vice president and global head of merchant and NextGen commerce, Bill Ready, some of its merchants have seen a 50 percent or more improvement in consumer conversions.

That's an interesting claim. But more interesting is the story behind the One Touch product, which serves as an example of how companies joining forces can sometimes have a transformative effect.

The story starts around 2008 when Ready was leading iPay, a service that allowed banking institutions to conduct financial business on the Internet and without the middleman of the credit card industry. Ready had already begun to notice that a growing percentage of the company’s traffic was coming from mobile devices, not long after the release of the iPhone and before the advent of the iPad. At that time, many e-commerce and banking sites had not yet put an emphasis on enabling their webpages for mobile.

As Ready explained to me, “When iPay was eventually sold [to Jack Henry & Associates in 2010] my premise was that if people are willing to jump through hoops on a tiny touchscreen device, than mobile was going to be a primary computing device.” At the time, the future of mobile e-commerce was trending towards swipeable dongles like Square and tap-to-pay retail experiences.

But Ready believed there was a different opportunity. After a stint serving as an EIR at Accel Partners, he join Braintree as CEO and began thinking about ways improve the online buying process, making repeat purchases and using foreign currencies easier. He says he kept coming back to the idea that e-commerce buying experience needed to be completely rewired.

At the time, Ready says his vision was contrarian to the mainstream thinking: “I remember being told that people wouldn’t do e-commerce on mobile because they won’t do a bunch of data entry on a tiny little touch screen device,” he told me.

Eventually, Braintree developed the technology that made it possible for mobile users to make simple purchases directly from their phones and allowed apps like Airbnb and Uber to deploy intuitive payment processes. “We didn’t predict the Uber and HotelTonight use cases,” Ready said of the company’s early success, “but we did predict correctly that if we democratized access to these foundational elements like easy purchases then there will be this explosion of innovation on top of that.”

That innovation came through Braintree’s $26 million acquisition of Venmo, now one of the top peer to peer mobile payment apps having processed more than $900 million in transaction in the last quarter of 2014. The "bet-the-company" move, as Ready described it, came from a need Braintree was hearing from its customers who were having trouble acquiring users through the sign-up process.

“We started looking and seeing that across our user base that one person was signing up 10-15 times on the same device across different apps,” said Ready. “And we had all the information we needed to give them a more seamless signup experience.” What enterprise-focused Braintree lacked was a direct connection to the consumer which they found in the fresh out of beta Venmo.

This wasn't an obvious move. Braintree's arch rival Stripe was making the opposite bet: That all you needed was a superior experience for developers. Stripe still doesn't have a consumer facing app. Meantime, Square started out focused on the consumer. But as its digital wallet and other efforts have floundered, it has since switched its focus to catering to the small merchants relying on it hoping to sell them more software and services.

Not only was it not obvious, it wasn't easy to part with the cash. Venmo wasn't close to mainstream, and Braintree itself had limited resources. Remember: This was before the age of unicorns.

In January of 2013, Braintree launched Venmo Touch, the first “one touch” mobile buying experience that allowed users to pay for goods or services with a single touch and not have to re-enter payment and shipping information on every new website.

By the end of 2013, Braintree itself has been acquired by PayPal.

According to Ready, after the acquisition he heard from a lot of people who wondered why Braintree, which many saw as an upstart competitor to PayPal, was joining forces with the Internet payments giant.

“Even before we came into PayPal,” he explained, “We [at Braintree] talked a lot what would PayPal look like if you built it fresh today, if you built PayPal for mobile.” It turns out that eBay/PayPal CEO John Donahoe was having similar discussion internally. For Ready, having as similar vision for payments as PayPal was one enticement, the other was to take their innovations in e-commerce payments and deliver the same experience to millions of PayPal users and the millions of merchants in its network.

"The thinking was that we could do what we were doing in a bigger and better way inside of PayPal," Ready said.

Eight months in, PayPal released One Touch for native applications, which was an updated and expanded equivalent of Venmo Touch. The success of PayPal One Touch on mobile, with its 50 percent conversion rate rate, led to yesterday’s launch of the Web version of the feature, what Ready described as “biggest upgrade to the e-commerce buying experience since the introduction of the PayPal wallet 15 years ago.”

"We think that this will be the default way that people buy things for the next couple of years," Ready added.

The Braintree/Venmo/PayPal story has not yet reached its conclusion. As Ready explained, the company is still trying to find new ways to make the interactions between consumers, their devices, and e-commerce companies more seamless. As he explained, at some point, Ready hopes that users will be able to step off of a plane in any city and have their hotel reservation taken care of immediately through HotelTonight and have an Uber waiting for them at the curb. That is, of course with PayPal as an intermediary.

Through all the events that led to the launch of PayPal One Touch for Web, you have to admire the way Ready has operated, not how many founders of acquired companies might by bringing more value to the parent company than was there before Braintree joined PayPal.

"This is the culmination of the vision that I was serious about early on with mobile e-commerce," Ready said. "This wasn’t a let's grab the cash and head off into the sunset, I really believe that there is no better place than inside of PayPal to reinvent the way people buy and sell online."

It's a rare case of an acquisition helping fulfill a long fought vision-- not destroying it.