Not to be outdone by its rival Stripe, Braintree is launching an online and mobile payments system optimized for the growing number of collaborative consumption apps and services such as Airbnb, Lyft and TaskRabbit. The idea is that these new marketplaces do away with the traditional single-seller model of e-commerce and therefore need new ways of handling their community transactions.
Stripe tweaked its own payments platform in June to more easily handle collaborative consumption transactions for its customers Lyft, Sidecar, Exec, Postmates and Shoptiques. Now Braintree is doing the same with a service called Marketplace, signing up TaskRabbit as its first customer. Braintree, however, is bringing some extra muscle to its platform, adding its Venmo mobile payments and digital wallet technologies to the mix.
So how exactly are mobile payments so different for collaborative consumption companies? Braintree explained in its announcement:
One of the biggest challenges for marketplaces is handling the flow of money between the marketplace, seller and buyer. Historically, the marketplace would stand in the middle of the transaction – claiming funds from the buyer, validating the seller’s bank account information and delivering the funds to the seller – subjecting the marketplace to compliance and regulatory issues as well as administrative complexity. The fact that many marketplaces are inherently mobile makes it even more difficult to gather complicated financial information from users on the move.
With Marketplace, buyers are able to pay in a single touch and sellers can receive money directly on their mobile devices. The money flow is managed by Braintree so the marketplace operator never touches the funds, alleviating many compliance and regulatory burdens. Braintree also handles 1099 tax reporting, allowing the marketplace to focus on innovation and growth rather than handling IRS requirements.