Here’s How PayPal Allows Merchants to Use Buy Buttons

February 11, 2016, 7:00 PM UTC
Photograph by Jeff Chiu — AP

PayPal is continuing to show Thursday that its business is evolving beyond just offering a digital wallet to consumers.

Shortly after PayPal split from eBay in 2015, it acquired commerce startup Modest, which basically allowed merchants to integrate e-commerce into their apps and emails. On Thursday, PayPal said that it has integrated Modest’s technology into a service for merchants, under the umbrella of what the company calls “PayPal Commerce Tools.”

One of the things that drew PayPal to buy Modest’s business was its early bet on buy buttons, which let people buy items directly from apps without having to go to another web page. PayPal’s Modest-inspired service allows retailers to embed buy buttons within their own apps, and other areas. Products can be sold anywhere a consumer might see them, including email, blogs, articles, ads, or in mobile apps. Currently the service is free for retailers and merchants to use.

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Many social networks, including Facebook, Pinterest, and Twitter are embedding buy buttons on their sites to let people buy items they see on the social networks. In Spring of 2015, PayPal’s payment processing business, Braintree, partnered with Pinterest to help process payments for the site’s buy button. And in late 2015, Braintree also started powering payments made when Facebook Messenger users order Uber rides from the app.

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As Modest’s co-founder and current Braintree employee Harper Reed explained, PayPal’s new service allows retailers to add e-commerce into their websites and apps without having to “hire a tech team.” Merchants using these buy buttons are also not required to be using PayPal or Braintree to process their payments.

Braintree rival Stripe also offers a similar service to retailers and already has a number of high profile merchants using its service, including Best Buy, Adidas, and Saks Fifth Avenue.

While Facebook, Pinterest, Twitter and others have debuted their forms of the buy button, it still feels like it’s early days for the adoption of the technology. There isn’t much concrete data showing that consumers are actually using these buy buttons to make a meaningful amount of purchases. And Pinterest and PayPal aren’t making any revenue from these purchases, at least not yet.

As soon as one of these companies release data around buy button usage, we will have a clearer view of the opportunity.

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