In an ideal world, consumers would enter their payment information into apps like Uber or Airbnb once and never have to worry about it again, even if they get a new credit card.
That world has just become a reality.
PayPal subsidiary Braintree today announced a new feature called “account updater,” which will automatically update consumers’ credit card information for merchants when they receive a new card from their bank. Ignore the boring name: This has some major implications for how consumers pay for goods and services — and says a lot about PayPal’s future ambitions for online payments.
As part of the PayPal team — PayPal owner eBay acquired Braintree for $800 million in September — Braintree’s goal is to remove as much friction as possible from the payments process for consumers, merchants, and developers.
“We want to provide an operating system for payments, much like iOS is an operating system for mobile,” Braintree CEO Bill Ready told VentureBeat on Wednesday.
That means introducing layers of abstraction so everyone has to worry less about banks and security — well, everyone except Braintree — and more about innovative payment integrations.
Ready compared Braintree and PayPal’s joint vision for the future of online payments to Amazon’s vision for cloud computing: Just as Amazon Web Services democratizes sophisticated data infrastructure capabilities, he said, Braintree enables startups and mid-sized businesses offer seamless payments experiences without the onus of security or compliance.
To make that happen, Braintree has been quietly crafting backend integrations with nearly every major bank in the U.S. and around the world. Those integrations enable tools like account updater, which is a boon for companies like Uber, Airbnb, Fab, and everyone else using Braintree.
Companies are used to losing some customers when they’re issued new credit cards because people are less likely to pay for a service if they have to reenter their credit card data. That’s no longer a problem for merchants using Braintree. If you’ve previously given card information to a company and you’re forced to cancel it — say, because Target got hacked — your replacement card will automatically work with that vendor. But that doesn’t mean Braintree is funneling credit card data from your bank to Uber’s customer database: Vendors never have access to your raw credit card data.
Some of the payment behemoth’s scrappier, quicker competitors offer similar functionality, too, but none at this scale.
“We’ve had a number of people move to us because this functionality is often not readily available to startups, comes at a substantial cost, or doesn’t work well,” Ready told VentureBeat. “We’re offering it for free and have much broader data than most anyone else in the industry given the number of banks we work with and the amount of consumer information we have available. Most credit card processors don’t interact with consumers directly and therefore don’t have access to anywhere close to the amount of consumer information that we do.”
This one feature is just the beginning, promised Ready, who alluded to “some really exciting features” in the pipeline. He declined to elaborate on specifics, but pointed to Venmo Touch (a single-click purchasing feature for Braintree merchants) as the kind of innovation PayPal and its subsidiaries are bringing to the payments landscape.
“The future of payments is going to be all about who can help hundreds of millions of consumers connect seamlessly with millions of merchants,” said Ready.
“We’re in the midst of one of the biggest changes of human behavior in the last 100 years as people move to mobile devices. As you walk down the street, you watch people with heads down, elbows tucked in, as they look at their mobile device.
“We’re at the forefront of providing apps and experiences for those mobile devices, which is super exciting — but I think that’s also the biggest challenge as well. … We’re still [in the] very early days, and there’s a lot more left to build.”