PayPal Seals the Deal with Honey in $4 Billion
In recent events, PayPal acquires Honey, a browser extension that helps e-commerce shoppers to find online coupons and discounts. The extension allows you to add coupons and discounts right when you’re about to exit the shopping store. This acquisition costs around $4 billion which is marked as one of the largest investments done by PayPal in history.
Previously, PayPal invested in a POS company called iZettle which capped around $2.2 billion. But now, it has simply surpassed its own investment mark by almost doubling up its own investments.
Currently, the Extension company Honey has approximately around 17 million monthly active users. It is serving more than 30,000 retail online stores across the online sales industry. It works for a wide range of industries including markets and services like travel & tourism, fashion, and food delivery.
The idea behind acquiring Honey was to fuel discounts and coupons offers through already acquired Venmo app, which is a digital wallet used by 275 million users and approx. 24 million merchants. With Honey, PayPal will be able to source exclusive offers and provide a remarkable shopping experience to its Venmo customers. PayPal has a goal and it is to become one of the best financial transaction services around the world. And with the acquisition of Honey, the company can take a leap forward.
Believe it or not, but mobile payment has become a competitive market in the modern-day business sphere. The moment you log in to your favorite ecommerce store, you can find 10s of payment gateways through which you can make transactions. Yet, you only choose the one that surpasses the credibility of others. Some of the names trending in the market are Apple Pay and Google Pay wallets.
However, seeing this dramatic uprise in the usage of other payment gateway competitors, PayPal realized that it is high time they should do something to motivate their clients and hence, they acquired Honey. With Honey, PayPal can now own the entire shopping experience for its customers right from the beginning. Honey will allow customers to find interesting coupons and discounts. And when a person wants to purchase something by applying that coupon, in order to avail the discount, he or she would require to make a transaction using PayPal only. And that’s how PayPal will benefit.
Dan Schulman, the man behind PayPal stated:
“The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers.”
A great thing about Honey is its Honey Gold Program which is a loyalty program offering free gift cards to all those who are using the platform countless times. In fact, Paypal has started their own loyalty programs in collaboration with PepsiCo by providing cash back on certain beverages. It is no hidden fact that loyalty programs have successfully become a major focal point for the retail market.
Companies that are greatly suffering to maintain a brand image in the market use loyalty programs. Just 2019 alone, Honey extension has saved consumers from spending over a billion dollars. And in the wake of doing so, it has successfully made a $100 million in revenue.
George Ruan, co-founder at Honey says:
“Honey’s vision has always been to give consumers the tools they need to make the best decisions with their money, PayPal shares that vision and together we can build powerful commerce capabilities that create real value for both consumers and retailers around the world.”
So it is just a matter of time until Honey is going to see a more widespread future for its market growth. And, with PayPal at the side, things are going to upscale quite fast for the company.