Mobile Commerce Solutions Provider Acquired by PayPal

PayPal, the San Jose, California-based company, announced that it acquired Modest, a Chicago startup that helps merchants create mobile e-commerce applications for their stores. The terms of the deal were not disclosed. Modest’s 20 employees will be part of PayPal’s Braintree business, which manages and processes payments.

Modest was founded in 2012 in Chicago by Harper Reed and Dylan Richard, the engineers for President Barack Obama’s re-election campaign. It provides the platform with which businesses can create their own app or integrate their stores within existing apps. In addition to this, it provides retailers the tools to add buy buttons for their products so that consumers can make purchases in these apps.

E-commerce is a tried and true way to make money on the internet and yet it’s so untapped in various aspects of our lives, said Reed, the former CTO of Obama for America to Forbes. He pointed to the lack of buy buttons on most sites as an example. We want to create commerce where commerce doesn’t yet exist. Think of it like putting a buy button where a buy button belongs, but where they haven’t gone yet.

The acquisition of Modest by PayPal can be seen as a step taken by the company towards contextual commerce or the ability for an online shopper to buy something they see on a web page or social media site while browsing.

Contextual commerce is an exciting opportunity for PayPal, representing a new frontier for commerce that is rapidly growing. The acquisition of Modest will help us do amazing things in this area, faster than ever before. For merchants, this means PayPal will be able to offer a complete commerce solution (payments and order management) to help them add contextual commerce channels to the ways that they sell to their customers. For consumers, it will mean seamless, simpler and safer ways to buy the things they want, anywhere they discover them, said Bill Ready, Senior Vice President, Global Head of Merchant and Next-Generation Commerce at PayPal.

PayPal’s Braintree works with Pinterest's Buyable Pins for its payment processing. Pinterest is one of the most popular style-browsing apps available on both iOS and Android. It allows users to shop from retailers like Nordstrom and Neiman Marcus directly from the social media platform. The company claims to have a large user base of more than 72 million.

Now, with the Modest’s team on board with Braintree, let’s see how the company is going to use this new platform for serving merchants better on mobile and in the context of social media as well.