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PayPal Holdings Inc. has been on a drive for some time to reinforce consumer engagement with its products, and early Monday it launched its latest gambit to spur interactions with its still relatively new app. The so-called super app, launched a year ago, now includes a direct connection with Honey, PayPal’s discount aggregator, in a bid to move users to see the app as more than a tool at checkout.
“PayPal Rewards will make it simpler for PayPal consumers to earn rewards through a unified and easy-to-use rewards platform where they can access their cash back savings and other PayPal Rewards points, all in one location within the PayPal app,” a spokesperson tells Digital Transactions News.
The effort to get users to see PayPal as more than simply a checkout tool has been a top priority for the company’s top management for some time, with user engagement a closely monitored statistic. The San Jose, Calif.-based payments giant is starting to see results. In August it reported its transaction count in the second quarter had grown 16% year-over-year, to 5.5 billion.
“One of our strategies and goals is to drive more engagement among our customers, delivering the right tools, products, and services to help them succeed and manage their financial lives,” says a PayPal spokesperson.
PayPal Rewards, the program announced Monday, features what the company calls a “unified rewards” program that ties together in one place rewards users have earned through various PayPal services along with discounts found through Honey, a service PayPal acquired for $4 billion in 2019. The new feature is rolling out to the app starting Monday.
Monday’s announcement “illustrates that what PayPal is trying to do is keep people in their app and make the app their first stop,” notes Patricia Hewitt, head of PG Research & Advisory, a Savannah, Ga.-based consultancy. “You’ve to keep people within the app as shopping within the app is part and parcel of a super app.” The “super app” concept took flight last year as a number of companies launched apps that combine shopping, banking, and payments functions with discounts, offers, and other inducements and tools.
Rising inflation along with interest-rate hikes may have also made shopping features more useful within the app. “The economy is on shaky ground,” Hewitt notes. “People will respond to deals. It’s a logical step.”
The introduction of more shopping enhancements in the PayPal app comes as PayPal returned to growth in the second quarter, reporting in August $340 billion in payment volume, slightly exceeding the fourth-quarter 2021 total. That performance came after the company saw dollar volume dip in the first quarter. Also in August, activist investor Elliott Investment Management took a more than $2-billion stake in the company. “We’ve been working on a number of initiatives with Elliott,” PayPal chief executive Dan Schulman said at the time.
