On the November 20th, PayPal announced that they would go where no payment company went before, and delve into further endeavors than payments. They did so by acquiring a deal-finding company for 4Bn dollars, or known as Honey; this is considered the biggest purchase in PayPal history.
What is the Point of PayPal Buying Honey?
PayPal acquired Honey since it will allow the company to have a new source of information and understanding of online shoppers and their behaviors. It also paves the way to dig deeper into the patterns of online shopping and provide an array of services to consumers and traders.
The acquisition has taken place just as new competitors have emerged in the online payment industry, such as Apple and Google, causing PayPal to look for new methods to attract new customers and keep their loyal clients at bay.
With Honey and its online tools, which is going to be offered through a Google Chrome extension, they are utilized to follow prices and save money for clients. This will be done through an automated application of coupons and offers that are offered in the purchase. PayPal announced that it plans to expand its online payment service from the current seventeen million users of Honey, to the over 300 million users of PayPal and Venmo; Venmo is a person-to-person payments network.
They also announced that they would expand Honey’s services for businesses and retailers, from 30,000 businesses to the 24 million retailers that utilize PayPals’ services. The services include the access to target offers that are personalized for customers who establish the list of products they plan on purchasing on Honey.
What Does This Mean For Honey?
“This acquisition has the potential to be transformative for us,” Dan Schulman, PayPal’s CEO and senior management staff, stated “we think this moves us up in the entire shopping process,” instead of limiting PayPal to customers to the check out page of the online shopping websites.
Mr Schulman stated that the deal encouraged the development of deeper relationships with customers, and added that “we think this starts to position us with merchants that combines shopping, offers, payments together in integrated solutions.”
The transition is a mutually beneficial agreement on both ends, since PayPal needs the innovation of Honey, while Honey needs the reputation that PayPal globally acclaimed. Both companies will benefit greatly by merging and expanding its services to both target audiences, along with regular consumers and retailers.