People are 54% More Willing to Buy When a Business Accepts PayPal

Jun 02 2021 | Bill Ready, CCO and EVP, PayPal

Consumers are more willing to buy in newer or unfamiliar situations – like across borders, on mobile, with unfamiliar brands or for higher ticket items – if PayPal is accepted, according to a new study by Ipsos.
 
  • Consumers are 54% more willing to buy when a business accepts PayPal, especially in unfamiliar situations
  • 59% of PayPal users have abandoned a transaction because PayPal wasn’t there
  • 25% of people have abandoned a transaction because their preferred payments provider wasn’t there
  • Businesses can establish trust with consumers by offering preferred payment methods; 44% are more likely to trust and shop with businesses with a preferred payment provider and good payments process
  • Over the past few years, we’ve seen a dramatic rise in digital commerce. Consumers increasingly want to buy online, but there’s still a major gap between the percentage of consumers who shop online and the percentage of consumers who actually buy from the merchants where they shopped.
While consumers increasingly want to engage in the digital economy, they still have real concerns when buying online – concerns about buying across borders, transacting on mobile devices, making high priced purchases and buying from unfamiliar merchants. A lot of consumer concerns stem from a lack of trust when buying online and this is particularly harmful to small businesses.
 
Because of these concerns, shopping cart abandonment is still a major issue for businesses of all sizes. But it’s something that PayPal, as an end-to-end payments partner, has helped many businesses improve. Consumers are more likely to buy from a business when PayPal is offered because of our trusted brand and the secure and seamless payment experiences we enable.


 
Consumers are 54% more willing to buy when a business accepts PayPal
According to a recent IPSOS study* of people across the US, UK, Germany, Australia, Italy, Spain and Brazil, consumers are much more likely to buy from an online business that offers PayPal. On average, there’s a 54% increase in consumer willingness to buy when PayPal is available as a checkout option. When buying in situations where consumers have increased concerns -- like on mobile, across borders, from unfamiliar brands and when buying high priced items -- the effect of accepting PayPal is even greater.
 
Interestingly, having PayPal on a business’s site increases a consumer’s willingness to buy among both PayPal and non-PayPal users, as the graphs below show. While on average, the study found a 54% increase in willingness to buy across all markets when a business accepts PayPal, consumers in markets like Germany (+137%), Australia (+66%) and Italy (+57%) were even more likely to buy if a business accepted PayPal.
 
59% of PayPal users have abandoned a transaction because PayPal wasn’t there
The study also found that when comparing credit cards, debit cards and all other relevant digital wallets, PayPal is the most preferred payment method by consumers. At the same time, 59% of people who use PayPal said they have abandoned a transaction because PayPal wasn’t there.
 
25% of people have abandoned a transaction because their preferred payments provider wasn’t there
Presenting a variety of payment options and digital wallets can also drive consumer willingness to buy. That’s why PayPal has been so focused on enabling choice for its customers. Through PayPal Checkout with Smart Payment Buttons for example, we enable businesses to offer a wide range of relevant forms of payments, including cards, bank accounts, PayPal, other digital wallets and local alternative payment methods. PayPal Checkout with Smart Payment Buttons enables a seamless checkout experience that dynamically presents the most relevant payment methods at checkout, without merchants needing to clutter their checkout pages with numerous options that are not relevant to specific buyers.


 
44% of people are more likely to trust and shop with businesses if they know up front that their preferred payment provider is accepted
Finally, the study found that when consumers know early on in the shopping journey that their preferred payment method is accepted, they’re more likely to continue shopping and make a purchase. 44% of consumers said they are more likely to shop on a business’s site if they know up front that their preferred payment provider is accepted.
 
With PayPal Marketing Solutions and Smart Incentives, PayPal helps businesses let their customers know at the beginning of their shopping journey that they’ll be able to use PayPal to checkout, and that they will be able to checkout in a few taps with PayPal’s One Touch™.
 
Evolving role of payment providers
The role of payment providers is evolving. Businesses are no longer only looking for a simple back end payment processor, they need a partner to bring them customers, a sense of trust and security and things like seamless buying experiences across contexts. PayPal is focused on connecting it’s 250 million active customers to merchants of all sizes around the world, fostering trust and security though offerings like PayPal Purchase Protection and Seller Protection** and presenting the most seamless push button buying experiences like PayPal One Touch.
 

PayPal Cross-Border Trade Consumer Research (July 2018)

PayPal in partnership with Ipsos, conducted a global 31 market survey with approximately 34,000 consumers to examine how people shop online and across borders. Click here to see the Hong Kong Report.
 
*IPSOS. 2018 Online Payment Experiences Study. The IPSOS study was commissioned by PayPal and conducted in July 2018. Study of 10,500 people, including 6,930 PayPal users, across the US, UK, Germany, Australia, Italy, Spain and Brazil (1,500 people per market).
 
**On eligible purchases. Limits apply. See applicable terms here and here.

Frequently asked questions.

* 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.

You must confirm your email address first in order to start receiving payments. If someone sends you a payment, you’ll receive an email notification. You’ll need to manually accept the first payment you receive. The payments received afterwards will be automatically accepted into your account.

Here are some ways you can get paid:


The funds you receive will appear in your account balance on the Summary page. You can then use the balance to send payments or withdraw it to your bank account.

Compare our payment solutions to find the best fit for your payment needs in Hong Kong.

Website Payments Standard (WPS) offers a straightforward and quick way for you to securely accept payments on your website. Customers can pay by using their credit or debit card, or through their PayPal account. You handle the sales while we handle everything from the checkout process to security and mobile compatibility. Plus:
  • No advanced programming is needed.
  • Your customers don’t need a PayPal account to pay you.
  • It’s optimised for customers on smartphones or tablets.
And unlike many full payment-processing solutions, Website Payments Standard has no application, setup or monthly fees, or long-term commitments. You only need to pay a small fee when you make a sale. Learn more about PayPal fees.

How does it work?
Adding WPS to your website doesn't require advanced technical knowledge. You can simply add PayPal payment button code to your website. When your buyers click on the buttons, they’ll be directed to PayPal’s payment page to pay you.
  • If you need a shopping cart: Choose a shopping cart that's already integrated with PayPal, or add our "Add to Cart" button to your website.
  • If you already have a shopping cart: Select PayPal as your online payment service. If you have a custom-built cart, add PayPal by cutting and pasting HTML code into your checkout.
PayPal Invoicing has no set up or monthly fees. When a customer pays you online, you're charged a fee based on the amount of the purchase. Fees vary by country or region.
Learn more about fees.

How can customers pay my invoices?
PayPal customers can easily pay your invoices. They don't need a PayPal account to pay. They can also pay you with a credit or debit card. 

Can customers make partial payments?
To accept partial payment from your customer, check the Allow Partial Payment box under payment options when you're creating an invoice. This lets your customers make multiple payments toward the total amount of a single invoice. However, the minimum amount that you set will only affect the first partial payment that your customers make. For example, if the total amount of an invoice is 50.00USD and the minimum amount is 15.00USD, then the buyer will only be required to pay at least 15.00USD for the first payment and the buyer can pay any amount for the following payments. 

If you require a minimum amount due, your customer will need to pay at lease that amount in their partial payment. Your invoice will have a Partially Paid status until it's fully paid. A record of payments will appear on the invoice details. 

Partial payments aren't a credit product or a way to allow for an excessive number of payments. We contact businesses if we suspect they're not using this feature correctly. 

What if customers can't find my invoices? 
If your customer can't find their email notification for an invoice, their email filter might have sent it to the junk folder. If your customer has a PayPal account, they can pay the invoice by logging into their account where they'll see the invoice in their Activity. If needed, you can share a link to the unpaid invoice with your customer.

Can I send reminder emails for unpaid invoices?
To send a reminder about an unpaid invoice, find it in your list of invoices. On a desktop computer, click the three-dot icon and click Remind. On a mobile phone, you can send reminders from an unpaid invoice's details page. You can personalize the reminder before sending it. Your customer will receive an email reminding them to pay the invoice. To save time, set up automatic reminders for all new invoices in your Invoicing settings. You can also schedule automatic reminders warning customers when an invoice is overdue.
Set up automatic reminders.
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.