Australian business customers of payments platform Braintree have cautiously welcomed the acquisition of Braintree by payments giant PayPal last week for US$800 million.
“There was some nervousness when we heard about the acquisition,” said Matthew Macfarlane, director of Braintree customer and farm management software startup Agworld.
“We’re pleased to hear it will continue to operate as a semi-autonomous company.”
Macfarlane said it was Braintree’s culture and proactive customer service that Agworld had valued, and he hoped this would not be impacted by the PayPal deal.
The acquisition comes as an increasing number of online and mobile payments specialists enter the Australian market, targeting developers and startups not traditionally well served by Australian banks.
Many, including Braintree and Stripe, have targeted developers to help grow their customer base.
“It’s nice to see PayPal deciding that they need to pay attention to the developer community a bit more,” said Patrick Llewellyn, chief executive officer of 99designs, another Braintree customer.
“What Braintree has done is given developers access to a great tool set and this (the acquisition) is probably a sign PayPal recognises they [PayPal] haven’t done all that they could especially around the developer but also the mobile payments space.”
Analysts expect the deal will help give PayPal a stronger presence in mobile payments by taking on a new player that has been able to tap into emerging customers like Agworld, 99designs, Uber and Airbnb.
Braintree’s platform allows companies to offer consumers one-click mobile payments, storing payment information so that they don’t have to keep entering their details or reauthorising.
“What we see in our research is consumers want a wider number of options to make their payments on their mobile devices or desktop or even within an application,” said Sam Yip, senior research manager at Telsyte.
“With payments it's all about speed so if you can decrease the path to purchase for the consumer there’s a chance they will transact with you more.
“Consumers are paying less for items but doing it at a more frequent level so it’s all about how fast can you transact with a consumer and also making it easier for them.”
Both Llewellyn and Macfarlane said Australian banks have not played much of a role in helping them with the payments technology required to grow their businesses.
“Australian banks are exceptionally risk averse to tech startups,” Macfarlane said.
“The level of support for online businesses leaves a lot of room for international operators like PayPal and Braintree to pick up market share from fast growing Australian online businesses.”
99designs, which is now operating in four markets, didn’t even put Australian banks on its radar as it sought new platforms to support its global growth.
“Payments has always been a struggle for Australian startups particularly in an international sense,” Llewellyn said.
“When we started we had very little choice in Australia and we ended up with Worldpay, and they’ve been pretty good partners but with very limited technology.
“Braintree gave us access to an independent infrastructure we could then plug different payment gateways into.”
Llewellyn said 99designs continued to evaluate different payment providers as it expanded around the world, including Stripe and European-focused Ayden.
“We’re learning more and more about the differences in payment structures all around the world,” he said.
For example, Llewellyn said, customers in Brazil expected a 12-month payment plan, something 99designs was not able to deliver via any of its current payments platform providers.