Braintree CEO, Bill Ready, says the increasing number of tech and commerce companies coming out of Australia is one of the reasons the company has chosen to expand locally.
Braintree provides an online payment solution, allowing businesses to accept credit card payments online and in mobile apps.
Since August this year, Braintree has launched in more than 30 countries; in Europe, the UK and Canada. It seems they’re up for a head-to-head tussle with Paypal — Ready told The Australian that PayPal was “just for the smallest companies but not something you’d run with if you’re a meaningful sized company.”
Either way, mobile is the next frontier: according to a report by Paypal and Ebay, mobile commerce (or m-commerce as it has been dubbed) is set to grow to $5.6 billion worth of retail purchases by consumers in 2012, up from $155 million in 2010. There’s big money for companies which can snatch some of the mobile pie.
“Today, 20% of all shopping sessions occur on a mobile device and in 2-3 years, and that will rise to 50% in the next 2-3 years,” Ready says.
“Most major ecommerce retailers don’t have a mobile optimized website. Conversion rates are 75% lower than they are online when a merchant hasn’t optimized for mobile.”
Ready says the benefit with Braintree is the payment gateway scales as a company grows. He lists both vehicle-booking service Uber and Fab.com as examples of companies which started using the payment gateway early, and have now scaled. Hey says Paypal is the only other option for startups here. He doesn’t mention any of the other Australian companies like Fat Zebra, Paymate, or eWay. Ready sees the ability to integrate the payments platform as being one of the company’s key strengths.
“We’re building a payments platform to make it easier for developers to build on, similar to what Apple did with its iOS platform. In the early 2000s, it was feasible to build a mobile app, but not many companies did because it required intimate knowledge of devices and wireless networks.”
“Apple’s platform allows developers to build a mobile app without any knowledge of the network or mobile device hardware. And as a result, mobile innovation has exploded. Our goal is to do the same for payments.”
We asked Ready what the pricing structure would be for Australian customers but he didn’t provide a response. We’ve asked again, so if we hear back, we’ll let you know. The actual pricing is no longer listed on the Braintree website either. However Six Revisions, a blog for web developers, has compared Braintree to a range of other payment providers, and says its plans include a $35 monthly fee. Transaction fees start at 2.29% plus a $0.30 charge per transaction.
At this stage, Braintree doesn’t have any immediate plans to offer Venmo, the social payments platform, it purchased earlier this year for $26.2 million, outside of the U.S. Venmo offers a similar service to Pygg, an Australian social payments startup, allowing you to pay friends for things like coffee or movie tickets via your mobile phone. The acquisition demonstrates Braintree’s increasing focus on the mobile payments space.
“With Venmo, we’ll be able to provide tools that make it easy for consumers to pay merchants on their mobile device. Together, Braintree and Venmo are providing a set of tools as important to the next 10 years of ecommerce as PayPal was to the previous decade.”
We were really excited about the arrival of Braintree but disappointed to find that their merchant account provider (NAB) will not support startups with some marketplace business models. Aussie banks seem to be more conservative than US banks.