EBay’s PayPal, the digital-payments unit being spun off from the Internet marketplace later this year, agreed to buy startup Paydiant to broaden its mobile offerings for merchants.
Paydiant, founded in 2010 and based near Boston, helps retailers such as Subway and Harris Teeter Supermarkets develop mobile-payment options and customer-loyalty programs in their own applications. Terms of the deal weren’t disclosed. The transaction is expected to close this month or next, PayPal said in a statement Monday.
The acquisition highlights how competition in mobile payments is heating up as PayPal prepares to become a stand- alone company from EBay. Rivals such as Apple and Google are pushing into the market with their own mobile-payment apps. Paydiant is already active in the mobile-payments industry with MCX, or Merchant Customer Exchange, a commerce system used by some of the world’s largest retailers, including Wal-Mart, Target and CVS.
The acquisition will let PayPal’s customers develop their own mobile applications to increase the use of payments through wireless devices like smartphones, San Jose, California-based EBay said. Paydiant’s 70 employees will join PayPal, the company said.
Retailers will also be able to build customized apps with options such as ordering a sandwich in advance, paying for a meal at a table or linking purchases through a customer-rewards program, according to Brad Brodigan, PayPal’s vice president of retail. Such features, combined with PayPal’s payments technology, will help the company win over merchants looking to expand mobile payments, he said in an interview.
“We think it gives us a tremendous advantage in simplifying mobile experiences,” Brodigan said.
PayPal is paying about $280 million for Paydiant, Re/code reported earlier Monday. Investors in Paydiant include venture capital firms North Bridge Venture Partners, General Catalyst Partners and Stage 1 Ventures.
Bloomberg News, edited by ESM
