PayPal is acquiring Honey Science Corporation, the startup that creates a deal-finding browser add-on and mobile app, for $4 billion with some components in cash. This acquisition, when it is completed, will be PayPal’s largest in its history, and will “give the payments giant a foothold earlier in the customer’s shopping journey. Instead of only competing on the checkout page against credit cards or Apple Pay, for example, PayPal will leap ahead to become a part of the deal discovery process, as well”, Techcrunch reports.
“What’s exciting is that we can take the functionality Honey now offers — which is product discovery, price tracking, offers and loyalty — and build that into the PayPal and Venmo experiences,” explains PayPal SVP of Global Consumer Products and Technology, and former Xoom CEO, John Kunze. “When Honey says they’re putting money in the pockets of their customers — that’s perfectly in line with what we want to do. We want to make digital commerce and financial services more affordable, easier to use, more fun and more accessible to people around the world,” he says.
Currently, Honey’s 17 million monthly active users take advantage of its suite of money-saving tools to track prices, get alerts, make lists, browse offers and participate in a rewards program called Honey Gold.
There is a huge lesson here for African paytech companies – you cannot just focus on competing for space in the checkout pages, you must become part of the “deal generation” if you want to thrive. The checkout page is getting crowded, and unless you have a pipeline, it may be tougher to scale your mission. What OPay is doing where it generates transaction pipelines via its OBus, ORide and other services, is going to be part of this redesign. Of course, even if a paytech cannot acquire, it can seek partnerships, as the peril of checkout page competition is evident.
Register for next edition of Tekedia Mini-MBA (June 22 - Oct 22, 2020) here. Four months, online, and costs $140 or N50,000 naira .