Braintree was one of several emerging competitors to PayPal
Ebay is buying online payment firm Braintree for about $800m (£500m) to strengthen its PayPal unit's presence on mobile devices.
Braintree's Venmo app lets consumers make payments on smartphones and tablets, an area Ebay is targeting for expansion.
Although PayPal is the dominant online payment platform, it faces competition from firms such as Braintree.
About 40% of Ebay's revenues come from PayPal, which has 120 million users
"We believe that this deal makes reasonable sense strategically as it expands PayPal's distribution and removes a competitor," said Mark Mahaney, an analyst at RBC Capital Markets.
Hill Ferguson, Ebay's vice president of global product, suggested more acquisitions to boost PayPal's mobile offering were being considered. "Anything's possible," he told reporters.
PayPal bought mobile app developer Duff Research in March to increase its technology expertise.
Research firm IDC has forecast that worldwide purchases over mobile devices would exceed $1 trillion by 2017.
Ebay said the acquisition of Chicago-based Braintree should be completed by the end of the year.
Source: BBC News - Business http://www.bbc.co.uk/news/technology-24292894#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
