Braintree’s $26.2 million deal to buy New York’s mobile payments startup Venmo seems to be paying off once more for the Accel-backed company.
The company is launching an easier way for collaborative consumption startups — which could include Braintree’s best-known clients like Uber and Airbnb — to pay their contractors or users.
Basically, the headache is this: these companies work with hundreds or thousands of drivers, TaskRabbits or users on their platforms and paying them with checks can make accounting logistically complicated. They have to mail checks. People have to cash the checks, and that can take between seven to 10 days.
Because Braintree already has a relationship with these bigger companies and then Venmo, the startup it acquired, makes payments easy via e-mail addresses and phone numbers, they now have a way to quickly pay independent contractors sans checks.
“Sending out checks is painful,” said Braintree CEO Bill Ready. “All you need now is the phone number. These companies have many, many providers behind the scenes and paying these people is a severe pain point.”
Called Venmo Payouts, the product includes an API that lets businesses pay their workforce from any bank account to any Venmo user via a Venmo account, e-mail or phone number.
Workers get notified immediately when they’ve been paid and they can cash out from their bank account or through Venmo. It costs $0.25 per payout, without other fees. During the beta, Braintree is giving away the first 1,000 transactions for free. Developers can apply for access here. They’ll be granted access on a first come first serve basis.
Braintree’s already tapped Venmo a couple of times for different products. The company kept the branding because they wanted a better direct-to-consumer relationship, which could prevent them from becoming a commodity payments platform.
They recently launched Venmo Touch, which is a way for consumers to quickly sign up to pay for goods and services without having to re-enter their credit card details.
Braintree is a payments platform that works with Angry Birds’ maker Rovio, Airbnb, Fab.com, OpenTable and Uber. They process at least $1 billion in mobile payments per year.