The PayPal application can be viewed on a mobile phone.
Felix Kästle | Image Alliance | Getty Images
PayPal makes another acquisition in the e-commerce space as it moves beyond payments into physical and online retail.
The digital payments giant announced on Thursday a deal to acquire the start-up Happy Returns for an undisclosed amount. The 120-strong Santa Monica-based company enables people to return things purchased online in person.
“We looked at the post-purchase experience because it is such a painful point. People want to shop online and return to the store and vice versa,” said Frank Keller, senior vice president of consumer in-store and digital retail at PayPal said CNBC in a telephone interview. “For retailers, we offer more comprehensive services than payments.”
Thursday’s deal follows PayPal’s $ 4 billion acquisition of Honey, a browser extension that will allow consumers to find and use coupons when shopping online in late 2019. PayPal also announced a deal in March to buy cryptocurrency security company Curv for $ 200 million. PayPal was an early venture investor in Happy Returns.
The acquisition will help resolve the sometimes cluttered logistics of returning and shipping items for merchants, and will help drive pedestrian traffic to these companies when the economy reopens, Keller said. Ultimately, he expects the product to encourage more merchants to sign up for PayPal products. The company founded by Max Levchin and Peter Thiel works with around 31 million companies that will eventually have access to their personal returns network.
The deal also fits into CEO Dan Schulman’s recent public focus on PayPal’s “trading platform”. Schulman highlighted online shopping as a key element of growth on an Investors Day earlier this year.
The online shopping boom triggered by the pandemic has helped PayPal achieve record payment volumes and sales over the past few quarters. During last week’s first quarter results, Schulman highlighted plans to launch a “next generation digital wallet” this year, which he called an “all-in-one personalized app” that is “increasingly bespoke and unique financial Purchases will enable services and payment experiences. “
Happy Returns has approximately 2,600 drop off points where buyers can return products for an instant refund or exchange. The company also points out a lower environmental impact. Reusable bags are used instead of cardboard for the transport of returns. The start-up works with direct-to-consumer brands like Rothy’s, Revolve, Everlane, as well as brands like Dressbarn and Steve Madden.
“It’s a far better customer experience because there are no labels or cardboard boxes to print, and most importantly, buyers don’t have to wait for their money to come back,” said David Sobie, CEO and co-founder of Happy Returns. said CNBC.
PayPal was a favorite on Wall Street during the pandemic as consumers moved to online banking. Executives expect the trend to continue and online payments “will remain essentially unchanged in a post-Covid world,” Schulman said during the first quarter earnings statement. Shares are up nearly 70% since May last year. But after a tech-driven sell-off this week, PayPal stock is up about 3% over the year.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to start a free trial today.