What can you do with $4 billion? Perhaps you will buy football clubs. With that sort of money, you can become the owner of multiple elite clubs in Europe. Or you may want to spend that money on a nice house, producing Hollywood movies and spend the rest of your life on vacation on the beach of Ibiza. Maybe you want to run for the 2020 US election and $4 billion will certainly help you to become the next POTUS. Well, PayPal didn’t think like that. That’s because PayPal has bought up Honey, the sponsor of multiple Linus Tech Tips videos, in a deal worth $4 billion.
Another identity of Honey is that it’s a popular money-saving service. It’s basically a web browser extension and tracks promo codes to save money for the consumers. Honey is a master at what it does. It routinely tries all the suitable promo codes for the costumers during checkout then selects the one that gives the most savings and applies it on the behalf of the costumers. This helps the shoppers feel more contented with their purchases and reduces shopping cart relinquishment.
Why would a company like PayPal go and spend this amount of money for a browser extension? Because in the long run, it will profit the company in many folds. First of all, Honey has 17 million active monthly users and it’s an incredible number for a browser extension. Moreover, it works with more than 30,000 online stores of different sorts, according to the PayPal press release. The press release also stated that Honey had shown 100 million USD in annual revenue in 2018 alone. And the growth rate of this profit is staggering 100% annually. PayPal intends to add Honey’s technology to its product line, increasing its reach to PayPal’s 300 million users.
PayPal will surely benefit from the addition of Honey to its system by combining shopping and rewards with payments. This will help both the companies to further simplify and personalize the shopping experience for the consumers. Given that PayPal already has 24 million online dealers on its book, its latest attainment will allow it to better mark and personalize experiences for clients the minute they arrive on a website. With companies like Apple, Goggle and Facebook moving further into payment space, capturing the attention of shoppers at the start of their visit rather than helping them pay for their goods at the end could give PayPal the catalyst it needs to become much more than just a payment company.
Whether the investment will work or not we will have to wait and see. But the initial signs are looking good for PayPal. They needed this step to bring something new in the payment market. As the competition is also increasing, this decision of PayPal has injected new blood within the company. At the end of the day, this competition is good for us, the consumers. The companies are trying their best to make our overall shopping experience smoother and more affordable. The upcoming holiday season will also benefit all the parties involved in this ecosystem from PayPal to retailers to consumers. I’m excited to shop in the coming days, are you?
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