Cost savings and business benefits, enabled by PayPal Checkout.
PayPal commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI)2 study and examine the potential return on investment (ROI) enterprises may realize by deploying PayPal Checkout and PayPal Pay Later.
The merchant payment provider market is complicated, filled with an ever-evolving mix of old and new technologies, strict regulations, and a revolving door of new mandates, players, and operating models. To keep up with this dynamic environment, merchants rely on their payment providers to stay ahead of the pace of change.1 Merchants require a payment provider that can build customer loyalty and trust, offer seamless checkout experiences, provide ”buy now, pay later” options, and support global markets.
PayPal is a well-established and trusted brand in the payment provider market, which helps customers feel more secure and confident when making purchases. PayPal Checkout is a secure and convenient online payment solution that allows customers to make purchases using their PayPal account or guest checkout, providing a seamless and trusted payment experience across various merchants. PayPal Pay Later is a suite of financing options provided by PayPal that allows customers to make purchases and pay for them over time, offering flexibility and convenience with deferred payments and installment plans.
Incremental profit from increased conversion rate
Interviewees cited that PayPal Checkout increased payment trust and security, provided a convenient and often improved checkout experience, and expanded reach by catering to an international consumer base. In turn, interviewees saw higher conversion rates with PayPal than with traditional payment options like credit cards.
Incremental profit from increased PayPal Checkout AOV
PayPal is a well-established and trusted brand, which helps customers feel more secure and confident when making purchases. Interviewees said that PayPal Checkout offered enhanced checkout convenience and speed, allowing customers to pay with a few clicks and without the need to enter their credit card details or shipping information repeatedly. The increased trust and user-friendly checkout experience contributed to higher AOV.
Incremental profit from PayPal Pay Later
Pay Later gave customers increased purchasing power by allowing them to spread out their payments over time, making higher priced cart values more accessible. This led to customers being more willing to make larger purchases.
In addition to the lift in average order value, the VP of e-commerce at one retail organization noted they experienced an increased frequency of repeat purchases when PayPal Pay Later was a payment option.
Incremental profit from customer retention lift
Several interviewees noted that PayPal Checkout drove greater repeat purchases and customer loyalty. By improving customer trust and loyalty, reducing payment friction, and offering enhanced security and payment protection, interviewees found that customers were more likely to purchase more frequently.
The senior manager of alternative payments at a retail organization noted they saw a 5- percentage-point increase in customer retention.
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
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