Meet today's shoppers where they are: everywhere

Aug 25 2021 | PayPal editorial staff

Shoppers are looking beyond borders – make sure you’re seen 
As the world seemingly stood still, everything shifted, including the way we shop. This rapid and widespread change accelerated many already familiar eCommerce trends across the globe.

Although it’s been an uneven global recovery, consumer confidence is gaining. The flock to online shopping isn’t localised, it’s happening at a global scale. This presents online sellers with a massive opportunity.
 

From pause to pivot: 4 global eCommerce trends to watch


1. Growth across markets

Online retail sales spiked 28% in 20201, compressing years of forecast growth into just weeks. In that short time, online shopping behaviors quickly became habits. Worldwide eCommerce will continue growing another 14.3% this year to an estimated $4.89T USD in total retail sales2.

growth across markets infographic

Consumer confidence is gaining across all surveyed markets, and most global business cycle indicators are on the uptick.3 The U.S. Consumer Confidence Index, a leading economic indicator, continued a rise that started in May 20204.

2. Growth across verticals

Consumers turned to online channels for more of their everyday needs during lockdown. As shoppers became more comfortable online, they became more comfortable shopping globally. Across our surveyed markets, 22% of online shoppers said they became more comfortable cross-border shopping since the pandemic5.

growth across verticals infographic

3. Growth across demographics

When faced with product shortages, budget constraints, and concerns about in-person shopping, buyers across all markets showed a far greater willingness to try new brands. They also showed openness to new ways of shopping, heading to digital and omnichannel options6.

growth across demographics infographic

Digital wallets were used more broadly for cross-border purchases5, especially in markets that have long preferred other options.

4. Growth across platforms

After years of increasing adoption, smartphones have reached a tipping point for the preferred device across all markets for online shopping5. Chinese online shoppers showed the highest preference at 86%, while large, developing markets like India, Mexico and Brazil showed the fastest smartphone growth rates5.

growth across platforms infographic

Globally, mobile devices are forecast to be used for 67% of all online purchases in 20217, with a proliferation of options including apps and popular social shopping platforms. But all eCommerce shopping, including on traditional PCs, is forecast to continue growing.
 

Global eCommerce: your new playing field

Across all 13 markets surveyed, the trend was unmistakable: online shoppers are spending more online and exploring new options, whether that means buying from a merchant across the street or across the sea5. Whether you’re a startup or an established company, opportunity awaits those ready to join the great pivot now happening across the world’s biggest markets, economies and institutions.
  The great pivot in global ecommerce

Download our 2021 Borderless Commerce report

The 2021 Borderless Commerce report captures the global shifts that are shaping the future of cross-border commerce. Identify potential areas of growth for your business, while exploring 13 key markets in depth.

Download the report
 
1. Insider Intelligence/eMarketer, Global Ecommerce Update, 13 Jan 2021
2. Insider Intelligence/eMarketer, Retail Ecommerce Sales Worldwide, 2019-2024, Dec 2020
3. OECD, Consumer Confidence Index
4. The Conference Board, Consumer Measures, 2021
5. PayPal commissioned Ipsos MORI PayPal Cross-border Insights 2021. n=13,000, 13 markets. Online survey of adults (aged 18+ who have purchased online in the past 3 months) between December 2020 — February 2021.
6. Ipsos, PayPal Borderless Commerce Dimensionalisers deck, Dec 20
7. Cap Gemini, World Payments Report, n=8600 customers, 21 countries, 243 expert interviews, August 2020
 

Frequently asked questions.

Magento has announced that it is ending support for all versions of its Magento 1 ecommerce platform, including all future quality fixes and security patches, as of June 30, 2020.

You must migrate to Magento 2 or another platform before June 30, 2020, if you are currently integrated with Magento 1.
 
Consequences of not migrating:
  • Increased risk of data breaches, with possible damage to your brand and reputation.
  • Exposure of becoming a security target without any upgrade or security patches.
  • Falling out of compliance with Payment Card Industry Data Security Standards (PCI DSS). These global standards are set by card entities and apply to all merchants that process payments.
Requirement 6 of the PCI DSS requires merchants to "develop and maintain secure systems and applications by installing applicable vendor-supplied security patches." Without future security patches, Magento 1 merchants will no longer be able to meet this requirement, which could result in costly and time-consuming remediation.

This is not a PayPal-specific requirement. PCI DSS requirements apply to your integrations with card payment brands, such as Visa, MasterCard, American Express, Discover, JCB, and any other payment processor on the Magento 1 platform. Visa has stressed that urgent action is required for merchants to migrate from Magento 1 and advised merchants to be aware of their responsibilities in securing their environment to help prevent the loss of payment card data. 

Please review the Magento Commerce Software End of Support FAQ here.
 
Migrate now to Magento 2 or another Partner.
 

What do I need to do?

If you are currently using Magento 1, you must do one of the following by June 30, 2020:
 

Migrate to the Magento 2 platform

Or migrate to another platform

  • See our Partners page for a list of system integrators and e-commerce solution providers.

FAQs

Q: Which versions of Magento 1 are impacted?

A: All versions of Magento 1 are impacted, including Magento Commerce 1 (formerly known as Enterprise Edition) and Magento Open Source 1 (formerly known as Community Edition).

Q: What happens if I continue using Magento 1 after June 30, 2020?

A: On July 1, 2020, your Magento 1.x platform will no longer be supported by Magento, which includes providing security patches critical to maintaining compliance with the Payment Card Industry Data Security Standards (PCI DSS). The global PCI DSS standards require each entity to “develop and maintain secure systems and applications by installing applicable vendor-supplied security patches.” Because Magento is no longer providing security patches, your integration may become more vulnerable to attacks, potentially resulting in impacts on your brand reputation, as well as potential financial impact. 

This is not a PayPal-specific requirement. PCI DSS requirements apply to your integrations with card payment brands, such as Visa, MasterCard, American Express, Discover, JCB, and any other payment processor on the Magento 1 platform. Visa has stressed that urgent action is required for merchants to migrate from Magento 1 and advised merchants to be aware of their responsibilities in securing their environment to help prevent the loss of payment card data.  
 
Magento Association, a separate entity from Magento, has published the following links providing merchants additional information and resources around the call to action for the upcoming June 30th deadline.   
  1. Magento 1 EOL Blog Post 
  2. Magento 1 Post-EOL resources 

Please review the Magento Commerce Software End of Support FAQ here.

Q: If I get the security patches, does that mean I’m compliant? 

A:  The security patches are one step towards ensuring meeting PCI compliance but do not necessarily equal PCI compliance. We strongly encourage migration from Magento 1 before July 1.

Steps you can take to ensure business continuity and no risk to your business or cardholders include migrating off Magento 1 or to ensure applying the security patches, and other actions such as passing PCI reviews with a Qualified Security Assessor (QSA).


Q: What is the cost of migrating to Magento 2?  

A: It depends on the size of your site and the complexity of the build.  We recommend reaching out to Magento. You may also contact System Integrators to discuss pricing options. 

 
Q: How long does it take to migrate to Magento 2 or a new platform?  

A: This is dependent on the requirements of your site, and the ecommerce platform you’re choosing to move to migration can take a matter of weeks, to several months.  We recommend kicking off your migration project as soon as possible.   
 

Q: What is the cost of the other platforms?  

A: It depends on the size of your site and the complexity of the functionality you want to develop.  You will need to contact the one that is the right fit for your business.  


Q: Does this only affect PayPal merchants?

A. No, all payment processing companies, including Visa, are following the same guidance and urgently advising their Magento 1 merchants to migrate to Magento 2 or another platform.

Q: How do I validate my PCI compliance?

A: The PCI Security Standards site provides a Self-Assessment Questionnaire (SAQ) that you can complete to validate your PCI compliance. One of the requirements of the SAQ form is to install vendor-supplied security patches within one month of release. Because Magento is no longer providing security patches after June 30, 2020, you will no longer be able to comply with Requirement 6, stating that you "develop and maintain secure systems and applications by installing applicable vendor-supplied security patches".

Q: Is there a chance the date will extend beyond June 30, especially given the COVID-19 situation?

A: No, Magento has already extended the deadline 18 months from November 2018 to enable merchants time to upgrade. Magento has confirmed that they will stop all support for Magento 1 as of June 30, 2020.

Q: If PayPal processes my card data, do I still need to comply?

A: Yes, even if you outsource part of your PCI DSS compliance to PayPal, you are still required to install security patches within one month of release, which will no longer be possible after June 30, 2020. In addition to these patches, merchants are responsible for meeting all requirements of their PCI DSS compliance.

Q: What resources are available to help me maintain PCI compliance?

A: PayPal has engaged with select System Integrator Partners to help you migrate to Magento 2.

Q: What are the alternate ecommerce solutions?

A: If you’re looking for alternate solutions, you can review our list of Ecommerce Solution Partners.

Q: Is PayPal providing migration support?

A: If you are based in the United States, you can apply for help to finance the move to Magento 2 Commerce Cloud through the Magento Migration Loan, a type of LoanBuilder Loan*, made available through PayPal.
* The lender for LoanBuilder Loan is WebBank, Member FDIC. This is an invitation to apply and not an offer or commitment to provide capital. Applicants must satisfy certain requirements to be eligible. WebBank is not affiliated with the offer to receive a full credit on the cost of financing and the credit is not part of your credit agreement with WebBank.

Q: What other resources are available?

A: You may find additional information from Magento at:
* The below information applies to Business accounts only.

How do I enable subscriptions for my business? 
Can I temporarily pause an active subscription? 
What changes can customers make to their own subscription plans? 
Can I enable subscriptions on my social media sites?
How do I track overall performance of my subscription business?   
What features are included in a PayPal subscription plan?    
Can I update the price of all active subscriptions in a particular plan at once?  
Does PayPal provide real-time webhooks for payment status? 
Can I modify the PayPal Smart Payment Button layout and color format to match the look of my website? 
Can I enable credit card, bank account and other payment method options for my subscribers?  
Can I generate API credentials for integrating subscriptions? 
Can I create a PayPal Sandbox account to test and integrate subscriptions? 
What happens when a subscription payment fails? 


How do I enable subscriptions for my business?  

You can enable subscriptions using one of 3 methods:  
  1. PayPal Subscription Dashboard and Smart Payment Button (SDK)
  • Go to your Subscriptions.
  • Click Create Plan and enter your subscription details.  
  • When finished, click Save Plan and Turn on Plan.
  • Click Generate Code and Copy Code to copy and paste the Smart Payment Button HTML/JS code to your website.
  1. Subscription REST APIs
  • Generate your API credentials through the PayPal developer portal.
  • Use the create plan API to produce and activate your subscription plan.
  • Use the PayPal JavaScript SDK to add the PayPal subscribe button to your website
  1. Sell on Social subscription weblink
  • Go to your Subscriptions.
  • Click Create Plan and enter your subscription details.  
  • When finished, click Save Plan and Turn on Plan.
  • Click Generate Link and Copy Link to copy and paste the weblink and add it to your social media platform.

Can I temporarily pause an active subscription? 

Yes. To pause a subscription, follow these steps:
  1. Go to your Subscriptions.
  2. Select the subscription profile.   
  3. Select the button next to "Paused".
You can also reactivate a subscription following the steps above and selecting the button next to "Active". 

Note: PayPal doesn't charge customers for subscriptions that are paused.  
 

What changes can customers make to their own subscription plans? 

Customers can modify their existing subscription quantity. The subscription price will be based on the new quantity.
 
Customers can also switch plans for the same product. The billing and pricing terms of the new plan will take effect during the next cycle.
 

Can I enable subscriptions on my social media sites?

Yes. You can enable subscriptions on social media platforms including Facebook and Instagram. Here's how:
  1. Go to your Subscriptions.
  2. Click Create Plan and enter your subscription details.  
  3. When finished, click Save Plan and Turn on Plan.
  4. Click Generate Link and Copy Link to copy and paste the weblink and add it to your social media platform.

How do I track overall performance of my subscription business?  

You can track performance through various metrics on the dashboard. Here's how:
  1. Go to your Subscriptions.
  2. Click Overview.
The overview page allows you to view cumulative revenue and total subscriptions count for your business. You can also compare the performance of different subscription plans by churn rate, monthly recurring revenue and customer lifetime value.
 

What features are included in a PayPal subscription plan?    

You can choose from multiple features to customize subscription plans and pricing, including:
 
Cross-border subscriptions. Define subscription plans in different currencies to enable cross-border subscriptions. The customer will be charged in the currency you configure.
 
Promotional trial cycles. Offer free or discounted trial cycles to your subscribers by defining trial periods for subscription plans. You can define up to 2 trial periods and set discounted pricing.
 
Example: A merchant offering video streaming service configures a subscription plan at $0 for the first month, $4.99 per month for the next 2 months and $9.99 per month onward.
 
One-time setup fee. Define a one-time setup fee for any registration or configuration purpose.
 
Example: A merchant charges a $10 registration fee to enroll in gym and yoga classes, normally priced at $50 per month.
 
Negotiated or discounted prices. Customize any subscription at a negotiated or discounted price to certain customers.
 
Example: An educational institute typically offers online tuition classes at $10 per month but offers a discounted price of $8 per month to a specific student.
 

Can I offer tier-based pricing to my subscribers?  

Yes. You can define volume-based and tier-based pricing models for your subscription plans.  
 
Example: A merchant offering helpdesk services and live technician support defines a tier-based plan at $20 per technician for the first 10 technicians, $18 per technician for the next 10 technicians and $15 per technician after that. If a subscriber requires 30 technicians, the subscription price will be: $20x10+$18x10 + $15x10 = $530 per month.
 

Can I update the price of all active subscriptions in a particular plan at once?  

Yes. You can update the price of all active subscriptions by updating the price of the original subscription plan.
 
Example: If you update the price of a 'standard' plan from $20 per month to $25 per month, then all existing and new subscriptions under the 'standard' plan will be charged $25 per month from the next effective billing cycle.
 

Does PayPal provide real-time webhooks for payment status? 

Yes. PayPal provides webhooks for all payment and lifecycle activities. To track payment status, your platform must be set up to listen to the webhooks.
 

Can I modify the PayPal Smart Payment Button layout and color format to match the look of my website? 

Yes. To change the look of the PayPal Smart Payment Button, follow these steps:
  1. Go to your Subscriptions.
  2. Click Subscription plans.
  3. Click the 3 dots to the right of the plan you want to update and select "Copy code".
  4. Click Copy Code to copy and paste the button code into any editor and make your changes. 

Can I enable credit card, bank account and other payment method options for my subscribers?  

Yes. PayPal supports full stack payments capabilities including:
  • PayPal
  • Credit/debit card and bank account via the guest flow for non-PayPal customers
  • Unbranded or white-labeled card support (via API only)

Can I generate API credentials for integrating subscriptions? 

Yes. You can generate API credentials through the PayPal developer portal.
 

Can I create a PayPal Sandbox account to test and integrate subscriptions? 

Yes. You can create a PayPal Sandbox account through the PayPal developer portal.  
 

What happens when a subscription payment fails? 

If a subscription payment fails at the start of the billing cycle, we'll try the payment again every 5 days for a maximum of two retries until the next billing cycle.
 
If the second payment attempt fails, we'll increment the failed payment count by 1, place the failed payment amount in the customer's outstanding balance and add the amount owed to the next billing cycle.
 
You can also set a failure threshold for subscription plans. We'll pause the subscription if the customer exceeds the failure threshold.
 
You can capture an outstanding balance at any time. You might want to do this if the failure threshold is met and the subscription is suspended.
Item Not Received chargeback

Physical Item
When responding to an Item Not Received claim you can provide a tracking number as evidence that the customer received their item.
  • Be sure it can be verified online and shows delivery to the address the customer provided in the transaction details.
  • If the transaction is over $750 USD (or currency equivalent), signature confirmation must be included.
  • If the online tracking doesn't show delivery, you’ll need to upload a document from the postal company confirming delivery.
Service/Virtual Item
If the buyer says they didn’t receive the service or virtual item, you’ll need to provide evidence that it was delivered, used, provided, or the service was completed.
  • The evidence must be linked to the buyer (i.e. name, address, email address, PayPal transaction ID, or some other identifier that we can find in our transaction details - such as an invoice ID).
  • The evidence must clearly show the fulfilment of the transaction and that the customer either benefitted from the transaction or had the opportunity to do so in accordance with the terms and conditions of the service.
  • The evidence provided must come from sources or procedures already in place and must not be created ad hoc in response to the claim.
  • Provide any evidence or other relevant information that verifies the receipt of the item or completion of the service.

Unauthorised Chargeback

Physical Item
When responding to an unauthorised chargeback, provide a tracking number:
  • Be sure it can be verified online and shows delivery to the address the customer provided in the transaction details.
  • If the online tracking doesn't show delivery, you’ll need to upload a document from the postal company confirming delivery.
Service/Virtual Item
When responding to your chargeback, provide evidence that the virtual item was delivered, used, provided, or the service was completed.
  • The evidence must be linked to the buyer (i.e. name, address, email address, PayPal transaction ID, or some other identifier that we can find in our transaction details - such as an invoice ID).
  • The evidence must clearly show the fulfilment of the transaction and that the customer either benefitted from the transaction or had the opportunity to do so in accordance with the terms and conditions of the service.
  • The evidence provided must come from sources or procedures already in place and must not be created ad hoc in response to the claim.
  • Provide any evidence or other relevant information that verifies the receipt of the item or completion of the service.

Merchandise Chargeback

When responding to a merchandise chargeback provide the following information:
  • A short (one or two sentences) overview of your business model and process.  
  • A response based on the chargeback reason, describing why the chargeback is unwarranted and a refund isn't due. Provide details of the terms and conditions the buyer agreed to when making the purchase that apply to this situation.
  • Any documentation (including pictures) that would be helpful when determining the outcome of the claim. Please don't send stock photos.
  • Any correspondence you had with the buyer in question as they attempted to resolve the issue directly with you.
Item Not Received claim

When responding to an Item Not Received claim you can provide evidence that the customer received their item.

Physical Item:
  • Tracking number:
    • Be sure it can be verified online and shows delivery to the address the customer provided in the transaction details.
    • If the transaction is over $750 USD (or currency equivalent), signature confirmation must be included.
    • If the online tracking doesn't show delivery, you’ll need to upload a document from the postal company confirming delivery.
Service/Virtual item:
  • The evidence must be linked to the buyer (i.e. name, address, email address, PayPal transaction ID, or some other identifier that we can find in our transaction details - such as an invoice ID).
  • The evidence must clearly show the fulfilment of the transaction and that the customer either benefitted from the transaction or had the opportunity to do so in accordance with the terms and conditions of the service.
  • The evidence provided must come from standard systems or procedures previously in place and must not be created ad hoc in response to the claim.

Significantly Not As Described claim

Here are some helpful tips on what documents you can submit as evidence for your claim:
  • Provide a short (one or two sentences) overview of your business model and process. This description can be reused for every claim.
  • Respond to all questions raised by the buyer in their claim describing why the claim is unwarranted and a refund isn't due. Provide details of the terms and conditions the buyer agreed to when making the purchase that apply to this situation.
  • Send any documentation, including pictures, that would be helpful in resolving the claim. Please don’t send stock photos.
  • Provide any correspondence you had with the buyer in question as they attempted to resolve the issue directly with you.
The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.