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Head of E-commerce at DUO
13 October 2010 13:46pm
Hi all,
I've been asked to look into whether it would be a "good idea" to provide PayPal as a payment method on our transactional websites. I think a "good idea" adds up to:
1) Will it increase conversion rates? I.e. will people who wouldn't buy from us before, now buy from us because we offer their prefered payment method?
2) Will it cost us more? I.e. will everyone stop using debit and credit cards and start using PayPal (which I believe has higher per transaction charges)?
Any advice please on how we might answer these questions? Has anyone been through this process already and have some insights?
Grateful for any thoughts...
Thanks,
Gareth
Director at Watson Hall Ltd
13 October 2010 20:21pm
Depending on how payments are taken currently, using an off-site payment processor may reduce the scope of your cardholder data, and thus reduce PCI DSS compliance costs. People can pay using debit and credit cards at PayPal too.
While you are at it, another "good idea" to compare might be Checkout by Amazon.
Managing Director at indiumonline
15 October 2010 11:05am
Hi Gareth,
I'm afraid I don't have any stats I can share, but thoughts as follows:
1) yes it will increase conversion rates, there is a %age of population who would rather pay by paypal - by giving them the choice they're more likely to convert.
And so long as the integration is doen properly you won't see a drop off
2) I'd suggest working out the fees from each and seeing how big the difference is.
Also, as Colin's suggested, if your'e going down the 3rd Party payment solution route - also worth looking at Google Checkout.
Hope that's helpful
Chloe
Assistant Marketing Manager at Nu-Heat
15 October 2010 12:09pm
This is only anecdotal but I like it when stores offer the Paypal option. The benefits for me can be two fold.
1. If i've sold something on ebay and have cash in my paypal account I can use it up that way.
2. Having my paypal account linked to my bank account I can pay with pp and the money gets taken straight from the a/c, that way I don't have to hunt around for my card and remember my verified by visa password to make a purchase.
I suppose as a retailer you may pay slightly higher charges on a paypal transaction but if it means you get an extra sale is that not worth it? Slightly higher charge or no sale?
Director at Watson Hall Ltd
15 October 2010 12:55pm
Yes the 3D Secure (e.g. Verified by Visa), is often poorly implemented from a usability perspective, and Paypal offers some alternative options for people more concerned about the protection of their payments and accounts:
https://www.paypal.com/cgi-bin/webscr?cmd=xpt/Marketing_CommandDriven/securitycenter/PayPalSecurityKey-outside
For a longer term plan, have a glance at the ways mobile payments might be integrated with websites:
http://www.clerkendweller.com/2010/7/16/Mobile-Phone-Payments-A-European-Perspective
Managing Partner at 3TouchPoints, LLC
15 October 2010 18:38pm
Hi Gareth,
I have been to these kind of exercises in the past and no doubt, it's tough to create a business case if, you don't have vertical specific data. Since, you have not mentioned about which industry vertical you belong to and what is your target audience and their persona, it's tough to suggest a relevant solution in this regards.
Based on the last few projects I did in the Apparel, Sporting Goods and Home Decor vertical, I saw a revenue contribution from Paypal fluctuate between 7-12 % while, Google checkout between 3-6%. Credit Cards still contributing over 75% of online revenue. Again, the stats can vary from industry to industry and your target audience.
Let me know if you want to discuss more on this offline?
Sushant
CEO at Econsultancy
21 October 2010 13:08pm
Hi Gareth
Would need to know more about your target market, vertical, countries your customers are based in to give a better answer. Broadly speaking I think PayPal works well for more 'consumer' purchases (eBay own PayPal, of course, and are pushing it currently to eBay users) and also in countries where credit (and therefore credit cards) are less common (e.g. India).
We added PayPal to our checkout quite recently and we are seeing transactions coming through (probably only 2% are PayPal) but it's not clear whether these are incremental transactions or whether the PayPal buyer would have bought with a credit card anyway if PayPal hadn't been an option. On the small sample we've asked they all said they would have paid by card if PayPal hadn't been there - so little evidence of additional incremental sales/conversions yet.