Paypal announced its largest acquisition ever with the intended purchase of Honey.Paypal’s Honey deal demonstrates the importance of shopping discounts for payment companies. The Honey acquisition will give Paypal access to consumer preference shopping data and move it from simply a processor of payments to an advertising platform.
The move comes relatively late for Paypal compared to its payment peers. Most large US banks that issue payment cards have already entered the advertising market with card-linked offers. The large payment networks including MasterCard, Visa and American Express realized years ago that access to consumer discounts and cash back were vital to increasing their relevance for consumers. They have all launched APIs to support adding discounts to consumer payment transactions. In many ways, Paypal’s acquisition of Honey is a move to catch up with rivals that have more advanced cash back /discount offerings.