E-Commerce service provider eBay Inc.’s (EBAY) Braintree unit is striving to integrate Bitcoin within its payments system.
Reportedly, Braintree, a mobile payment processing company, is in talks with Coinbase — a third-party bitcoin payment processor — and other bitcoin transaction providers to integrate the virtual currency within its payment platform.
Bitcoin is a digital currency platform with no central regulating authority involved in the transactions which are carried out directly between the involved parties. It is also called crypto currency because it utilizes military-grade cryptography to protect users against fraud.
Payments using Bitcoin can be made via different smartphone apps or their online versions. This is generally used for transferring funds electronically and does not require a credit card or PIN.
Last year, eBay acquired Braintree for $800 million in cash, in a bid to enhance PayPal's mobile payments capabilities. Braintree helps businesses set up online payments through merchant accounts, mobile apps, credit card storage and payment gateways. Its payment platform is used by many online and mobile startups, including Uber, Airbnb, Rovio, TaskRabbit, LivingSocial and OpenTable.
This could be a big move by Braintree as Bitcoin enjoys wide acceptance and enormous popularity. According to a website tracking the digital money’s use, CoinDesk, approximately 63,000 businesses handle bitcoins and have set up more than 5 million digital wallets to keep their holdings. Recently, Expedia (EXPE) announced that it will allow users to pay for hotel accommodations using bitcoins.
PayPal is taking all the necessary measures to enhance the mobile payment business growth. It is pushing beyond its online payments service and expanding its offline, mobile and online offerings to stores, restaurants and other businesses.
Though eBay’s payment business shows great promise, competition remains a major headwind. However, the latest move could position PayPal better against rival mobile payment systems such as Amazon.com Inc.’s (AMZN) recently launched Amazon Payments, Intuit Inc.'s (INTU) GoPayment and Starbucks backed Square Inc. and others.
Currently, eBay’s shares carry a Zacks Rank #3 (Hold).