When PayPal acquired discounting app Honey in early 2020 for $4 billion in cash, it presaged the beefed-up rewards and cash back power of the two properties combined.
With the July announcement that the rebranded PayPal Honey is now a mobile Safari extension, Honey-loving PayPal users now have a more safe and seamless way to save.
CEO Dan Schulman noted on PayPal’s second-quarter earnings call that Honey has saved PayPal users $100 million since joining the family. And Chris Hammer, VP and GM of Global Shopping at PayPal, told PYMNTS’ Karen Webster that the new browser extension ensures users can find more merchants and savings within the payments ecosystem.
For the consumer, Hammer said the new mobile browser extension “means bringing a lot of the incentives and rewards content” Honey is known for to more shoppers. At the same time, for merchants, it creates “a great opportunity for incremental leads and customer acquisition for our key brands where they get the opportunity to find the most engaged PayPal users and really have a chance to create a relationship with them.”
By driving savings and strengthening merchant-consumer bonds when The Consumer Price Index (CPI) hovers at alarming levels, Hammer said the benefits of having real-time insights with merchants and consumers present tangible value when needed.
Because of this two-sided relationship, he said, “we’re getting a lot of those signals real time, which tell us that these are the most important categories where the spend is shifting. This is where they need the savings the most. This is where we need to make sure we’ve got the right merchant participation. These are the price points that are most tolerable for consumers.”
It’s not that broader behavior across the platform is demonstrably different, but rather that “we haven’t always known what that behavior shifts to until you do a retrospective. Then you get into this mode of trying to say what should we have done? We’re just in a better position to do it now and give that support and help now versus the next time.”
See also: Commerce Is About More Than Shopping, It’s About Providing Value
Habituated to Saving
As learnings pour in from several years of Honey use now significantly enhanced by the mobile browser extension, PayPal now knows the value consumers assign to features like automatic couponing, cash back and rewards, particularly with their spending under a microscope.
By providing the technology that gives shoppers confidence they’re getting the best price facilitated by tech, he said, “We see a lot of engagement with that part of the experience. As we bring that content, those incentives, those cash back rewards into our PayPal app and top of funnel in PayPal.com we’re seeing a lot more engagement around those offers and deals, and not as an afterthought.”
“We’re actually seeing habituation to the idea of I’m going to go look for all those opportunities to save money before I go on a shopping journey.”
Webster noted that consumers cringe when they miss out on an appealing sale. PayPal Honey handles this with unintrusive reminders to complete unfinished shopping journeys, offering incentives to do so, and doing so in a flow that helps consumers and merchants.
Pointing to the difficulty merchants have sending the right offers to the relevant consumers, Hammer said, “What we are able to do is become a highly efficient way of knowing our consumers, knowing what those discount needs might be to convert the sale without just making it a race to the bottom where you’re always pushing constant discounts.”
This helps merchants make smart discounting and incentive decisions while “not over offering to consumers that don’t necessarily need it as much versus those that really need that extra boost to be able to bring it forward and do it all in one environment so that the consumer doesn’t have to stretch to 15 different places to finally end up back at that merchant site.”
See Also: UK Consumers Trust PayPal More Than Banks to Provide Super App, Study Finds
Freedom from FOMO
The endgame isn’t just discounting for one-off conversions but making savings the heart of relationship building between merchants and customers that endure beyond the sale.
Hammer said, “Our consumers have always trusted us for safe, fast and effective checkout. What we’re doing now is … making sure you’ve got access to all the right coupon and discount codes, even in those rare cases where it comes back and says, ‘sorry, you already have the best price,’ there’s value in that too. It’s peace of mind.” Call it freedom from FOMO.
At some point, this converges with consumer desires for super apps that aggregate their shopping and spending into one interface that does it all, with cash and prizes to be had.
“The concept of a super app means you need to expand those offerings and those capabilities,” he said. “Shopping by way of cash back rewards and incentives and coupons and deals is another way to remind a consumer as to what PayPal can actually do for them.”
It plays to consumers’ love of saving money and time, which Hammer believes will form the value prop around super apps that will bring about more adoption and engagement.
He said consumers would begin to realize that “this is something that makes sense for me to start my shopping journey on, not just come to check a balance, not just come to make sure I’ve got the right FIs loaded. We really do believe that these relatively new experiences and opportunities for our consumers round out that super app concept and put commerce squarely in the focus of how we want our consumers to engage with us.”
As much attention as PayPal is placing on savings and the super app concept, merchants want reassurance in a stormy economy and a digital assist from partners like PayPal to weather it.
What merchants want from PayPal in 2022 is “high quality leads that ultimately translate into increased revenue and sales over this critical holiday period. What we’re also doing is making sure that any of these new engagement points are not distracting,” because the holidays are not the time to approach merchants about new integrations and contracts, he said.
Instead, Hammer said PayPal is helping merchant partners get their holiday houses in order and “getting all the right incentive content to be able to push out there because we’re doing it in a seamless way that is meant to help facilitate this commerce flywheel for everyone.”
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