<type name="Magento\Braintree\Gateway\Response\VaultDetailsHandler">
    <arguments>
        <argument name="paymentTokenFactory" xsi:type="object">
            Magento\Vault\Api\Data\PaymentTokenFactoryInterface
        </argument>
    </arguments>
</type>

This is a type configuration.

This configuration is for the base area. Base area configurations will apply to all the sub-applications.

This configuration tells the Object Manager that when a user wants a Magento\Braintree\Gateway\Response\VaultDetailsHandler object that the following arguments should be used in the foo object's constructor.

• $paymentTokenFactory = new Magento\Vault\Api\Data\PaymentTokenFactoryInterface (...)

<type name="Magento\Braintree\Gateway\Response\PayPal\VaultDetailsHandler">
    <arguments>
        <argument name="paymentTokenFactory" xsi:type="object">
            Magento\Vault\Api\Data\PaymentTokenFactoryInterface
        </argument>
    </arguments>
</type>

This is a type configuration.

This configuration is for the base area. Base area configurations will apply to all the sub-applications.

This configuration tells the Object Manager that when a user wants a Magento\Braintree\Gateway\Response\PayPal\VaultDetailsHandler object that the following arguments should be used in the foo object's constructor.

• $paymentTokenFactory = new Magento\Vault\Api\Data\PaymentTokenFactoryInterface (...)

<preference for="Magento\Vault\Api\Data\PaymentTokenFactoryInterface"
            type="Magento\Vault\Model\PaymentTokenFactory"></preference>

This is a preference configuration.

This configuration is for the base area. Base area configurations will apply to all the sub-applications.

This preference configuration tells the Object Manager when a user wants a Magento\Vault\Api\Data\PaymentTokenFactoryInterface object that it should return a Magento\Vault\Model\PaymentTokenFactory object.