Sources close to the matter warned that talks could break down, and the terms of the deal are unclear, the report says.
Founded in 2007 in Chicago, Braintree processes more than $10 billion annually, and counts GitHub, Airbnb and Uber as customers. With 4,000 customers in the US and Canada, Braintree makes 30 cents per transaction and charges merchants a 2.9 percent commission.
Owned by eBay, PayPal is one of the most popular ways for merchants to accept payments online. Earlier in September, PayPal introduced a new version of its iOS and Android app to offer a fully functioning digital wallet to compete with Google Wallet. The acquisition of Braintree could help it draw more revenue from smartphone and tablet users, the WSJ says.
According to Gartner, the mobile-payments market will reach $235.4 billion this year, increasing more than three-fold by 2017.