eBay (NASDAQ: EBAY ) recently announced the completion of its acquisition of Braintree, a global online and mobile payment platform. Braintree is known for facilitating payments for popular companies Airbnb and Uber. eBay has indicated that Braintree will operate as a separate service within PayPal. The company has not clearly identified how it intends to incorporate Braintree's technology into its current PayPal mobile application, but has indicated that it will only do so in a manner that benefits PayPal customers.
eBay also acquired Braintree's popular Venmo mobile payment application, but has indicated that Venmo will remain a separate product. It is unclear if PayPal will adopt some of the social characteristics that are popular in the Venmo application. What sets Venmo apart from the competition is the social engagement features that allow a user's friends to like or comment on payments and annotations.
PayPal has indicated that Braintree will help the company transform the mobile payment space. It is likely that PayPal is looking at ways to add social media characteristics to its mobile platform. The collaborative effort will help launch Braintree onto a global scale with PayPal's resources and market reach. It will be exciting to see how the acquisition of Braintree transforms PayPal's mobile application.
eBay as an investment
eBay is showing some amazing growth: The company recently reported revenue of $3.9 billion in the third quarter of 2013, which represents a 14% increase compared to the same quarter in 2012. eBay also reported $0.64 earnings per share for the third quarter of 2013.
PayPal is showing some exemplary growth: PayPal reported a 19% increase in revenue to $1.6 billion in the third quarter of 2013. The company is also showing large gains in new registered users, and reported 5 million additional users in the third quarter of 2013 for a total of 137 million registered users.
Investors should carefully watch how eBay integrates Braintree's mobile technology into PayPal's existing application. The question is whether or not PayPal will attempt to include social media options to make the mobile platform more popular with users. Investors also need to monitor whether new implementations help increase the user base and expand PayPal's revenue.
Google Wallet is a direct competitor
Google (NASDAQ: GOOG ) recently retired its Checkout application and moved payment processing to the Wallet product. Google Wallet is an online payment processing application that is also available on both Apple and Android mobile devices. The Google payment application directly competes with PayPal in the online and mobile payment space. Google Wallet allows users to purchase digital goods through Google-hosted marketplaces, plus send money to family and friends.
Google continues to show incredible growth: The company reported revenue of $14.89 billion in the third quarter of 2013, which is a 12% increase in revenue compared to the third quarter of 2012. Google continues to show strong profits and reported $10.74 earnings per share in the third quarter of 2013.
Investors should be excited about Google's continued accomplishments in growing revenue and returning profits. The company is actively accomplishing CEO Larry Page's vision of creating a "beautiful, simple, and intuitive experience regardless of your device." Investors should carefully watch how Google reacts to any changes in PayPal's mobile application. It is important to determine whether or not Google will be a leader or follower in the mobile payment space.
Amazon acquires mobile start-up GoPago
Amazon (NASDAQ: AMZN ) recently acquired GoPago, a start-up that specializes in mobile payments. According to techcrunch.com, Amazon bought GoPago's technology and development team. At this point, it is unclear how Amazon plans to integrate GoPago's technology into its existing infrastructure. The takeaway from this recent acquisition is that Amazon plans to become a player in the mobile payment space.
Amazon has been showing some stunning growth: The company reported sales of $17.09 billion in the third quarter of 2013, a 24% increase compared to $13.81 billion reported in the third quarter of 2012. On the downside, Amazon reported a net loss of $41 million in the third quarter of 2013, which translates to a loss of $0.09 per share.
Investors should not fret over Amazon's lack of profits at this point. Amazon continues to reinvestment in growing technologies. The company is becoming a major player in several markets including tablets, cloud computing, and streaming video services. These are all areas of future growth for Amazon.
The recent acquisition of GoPago is a strong indicator that Amazon will enter the mobile payment space, which could be another amazing growth opportunity for the company. Investors should carefully watch how Amazon leverages GoPago's technology to become a major player in the mobile payment segment. It's also important for investors to watch how Amazon differentiates this mobile product from the growing competition in the space.
The bottom line
The recent acquisition of Braintree is an indicator that eBay is looking for new ways to drive innovation and improve the PayPal mobile platform. As users become more comfortable using mobile devices for financial transactions, the opportunities for mobile payment applications will grow. The future is mobile and the company that develops the best mobile payment application will likely capture the most market share.
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