Payments titan PayPal is shelling out $4 billion today in a transaction to purchase Honey, an online shopping and rewards platform. The deal is PayPal’s 20th acquisition and closely follows the California-based company’s arrangement with GoPay last month that gives it a 70% ownership in the China-based company.

PayPal, which offers solutions for both end consumers and merchants, will leverage Honey to create a better experience for the end customer while giving its merchant clients a boost through increased sales and customer engagement.

Honey brings with it a network of 30,000 online retailers and 17 million monthly active users. PayPal will be able to engage with these shoppers while they are still at the beginning of their online purchasing experience. Leveraging access PayPal’s 275+ million active customers and network of 24 million merchant accounts, Honey will be able to scale up its user base considerably.

Calling today’s purchase as one of the “most transformative” in the company’s history, PayPal President and CEO Dan Schulman went on to praise Honey for its ability to improve the online shopping experience. “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,” Schulman said. “As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales.”

Logistically, Honey will stay intact, maintaining its headquarters in Los Angeles. The company’s co-founders George Ruan and Ryan Hudson will continue to lead the Honey team, reporting to PayPal’s Senior Vice President John Kunze.

PayPal showcased its Instant Account Creation feature at FinovateFall 2012. The company has a market capitalization of $120 billion.