PayPal Is In The Mood For Honey And Acquisitions
In a bid to become more relevant to users, PayPal will acquire the online coupon finder startup Honey Science Corp. for roughly US$4 billion, adding valuable consumer data to PayPal.
According to Bloomberg, 17 million people currently use browser extensions to find online discounts while shopping, with Honey being one of the most popular.
Founded in 2012, Honey is a company that provides a browser extension that automatically applies coupons during e-commerce checkouts.
PayPal labelled Honey’s capabilities as giving customers a better shopping experience, helping to drive merchant sales and provide more timely and personalised offers.
Mark Palmer, an analyst at BTIG, said the acquisition could give customers and merchants a reason to choose PayPal in the face of increasing competition from the likes of Google Pay, Apple Pay and Facebook Pay (ALL THE PAYS).
It comes as Apple Pay exceeded PayPal transactions, with 3 billion sales during the fourth quarter of 2019, though many are predicting Facebook Pay to usurp both Apple and PayPal shortly.
However, it appears the addition of Honey is part of a continuing trend, with Chief Executive Officer Dan Schulman signalling that PayPal and its $10 billion cash reserve is looking to acquire more businesses.
‘You can expect us to be acquisitive going forward’, with Schulman describing acquisitions as, ‘a part of who [PayPal] is on an ongoing basis’.
PayPal is clearly aiming to shift the battle away from checkout transactions to where people are purchasing from and who they’re purchasing with.
By adding Honey, PayPal gives users another reason to use their service versus another.
PayPal SVP of Global Consumer Products and Technology, and former Xoom CEO, John Kunze explained how PayPal would build Honey’s offerings of product discovery, price tracking, offers and loyalty ‘into the PayPal and Venmo expereinces’.
‘When Honey says they’re putting money in the pockets of their customers — that’s perfectly in line with what we want to do’.
Schulman tied up the acquisition nicely saying, ‘the combination of Honey and PayPal adds another significant and meaningful dimension to our two-sided platform’.