I am sure most of you are familiar with PayPal. The online payment company started back in the late 90's. It was a subsidiary of Ebay and then spun off in 2015.
Well back in November of 2019 it announced it intended to purchase Honey for 4 billion USD. And as of January 6th 2020 PayPal has completed it purchase of Honey. Now if you are unaware of what Honey is, it is a mobile app and a browser add-on. I will sum it up very shortly. When you are on a website about to purchase something you can click the Honey icon and let is search the internet for coupons and promo codes to use on that website to save you money. It's an automated process that works pretty well. It also has other functions like price alerts, Honey Gold (rewards), and the ability to track prices.
I have a few thoughts that I wanted to share in regards to it.
Honey is free to use. And what I always say about something that is free to use is you are paying somehow whether you know it or not. So instead of just the browser, website, and your ISP tracking your traffic; you now have a browser add-on that is tracking your purchase history and partial website traffic. (Let's not forget if you use PayPal there are also tracking your purchase history). Honey has 17 million monthly active users. So that is data on 17 million people on what they want to buy, what they did buy and how much they paid to buy those items. I am not saying that you should be scared of using Honey and to boycott it. I am just trying to give people the information so they can make the decision for themselves and how much of their data they want private versus how much money they want to spend.
Why did PayPal buy them? I can think a few reasons.
1) PayPal now can see and watch more of the purchase process and track it. If you have a PayPal account then PayPal can track the purchases you make. However if I don't use PayPal to pay then they have no idea what else I am buying online. Now if I use Honey but not PayPal they will still be able to track it.
2) PayPal has something like 24 million merchant partners. And with PayPal owning Honey those 24 millions merchants can do targeted ads to people who are tracking their products or comparable products at cheaper prices. The list goes on. It just gives merchants way more information to gain attention to their products. Say for instance I have tracking a pair of Adidas sneakers for trail running in the Honey app. A website or company could target an ad to me for a pair of Nike trail running shoes that are cheaper than the Adidas ones. And a targeted "ad" or "coupon" from a source you trust is much more likely to be used or clicked on.
3) PayPal owns Venmo. Back in 2013 PayPal bought Venmo. If you don't know what Venmo is, it is a mobile payment service. Now that PayPal owns Honey which is all about saving money on the things you buys online it would makes sense to integrate that into PayPal and Venmo. Venmo also has a physical debit card. And maybe down the road we could have the option for all retailers to save coupons to our physical cards so when we go into a physical store the coupons are applied at checkout. It takes Honey from a online only instance to brick and mortar instance as well.
4) The thing with Honey is that its works online and the merchant doesn't have to sign up and pay fees and all that like it does if it wants Visa or MasterCard checkout or even PayPal check out. So it can touch more merchants quicker than PayPal and its rivals, which gives it a leg up on the competition.
I think this was an incredibly smart move for PayPal and for Honey. It's a complete win win for both of them I just wonder if it's a win for the consumer. If you are someone that doesn't want to think about online privacy or someone who knows how bad it is and has just said "F it"; then this news is awesome for you and you should reap the benefits of this acquisition for the years to come.
However if you are someone who values your online privacy and especially your purchase history, online web traffic, etc; well then I would caution you to use Honey. Do you stop there though or do you just not buy anything online so the banks can't track you as well? Should you only buy with cash in brick and mortar stores? It's a very deep and dark rabbit hole you can go down. I can't say what anyone should do because as someone who works in IT I know full well that the answer is very different for every person who uses a computer or cellphone. I just want to help inform the every day user just a little bit. What they do with that information is always up to them and completely their choice.
To date Honey claims to have saved it users 2 billion USD. Honey co-founders Ryan Hudson and George Ruan will stay on to lead Honey under the PayPal umbrella.
