Founded in 2012, Honey is best known as a popular discovery tool that helps consumers find savings as they shop online. Over the years it has added other features, such as a mobile shopping assistant, an offers and rewards programme, and price-tracking tools and alerts.

The firm has 17 million active users and claims to have helped these people find more than $1 billion in savings over the last year.

PayPal says the acquisition will help it reach shoppers at the beginning of their journey, a vital advantage in the battle for e-commerce customers against a host of new rivals such as Apple Pay, Google Pay and Facebook Pay.

For its part, Honey will get access to PayPal and Venmo's 275 million consumer accounts, as well as 24 million merchant accounts.

Honey, which was profitable on a net income basis in 2018, will keep its brand and LA headquarters once the deal closes early next year.

Dan Schulman, CEO, PayPal, says: "Honey is amongst the most transformative acquisitions in PayPal’s history. It provides a broad portfolio of services to simplify the consumer shopping experience, while at the same time making it more affordable and rewarding.

"The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers."