5 essential steps to a seamless online payment system

Dec 08 2021 | PayPal editorial staff

As payments technology evolves, the right e-payment system can help enterprises achieve a streamlined, global checkout experience.
The world is innovating rapidly and payment technology is no different. For instance, mobile wallets are becoming increasingly popular as an alternative payment method.1 As fraud detection and data security evolve, enterprises now possess the capability to take their e-payment systems to unprecedented new heights.

When it comes to online payment systems, your ideal business partner should be able to help you efficiently resolve payment platform problems. Similarly, they can provide you with the right tools to enhance payment processes with ease. They’ll assist you on the road to success with the best online payment system, instead of slowing you down, to help you drive conversions and boost your revenue through a global and streamlined experience.
 

Step 1: Optimise conversions with the right e-payment system

The first step to creating a seamless purchase experience is to optimise conversions. Think of a shopping cart as a lobby, one which welcomes potential customers to the buying phase. On reaching this lobby, they might turn back around if they find there’s no one at the front desk. Likewise, complicated checkout processes and outdated payment platforms can result in abandoned purchases and additional acquisition cost.

Consumers want more options in today’s connected world. In fact, 46 percent of smartphone users utilise peer-to-peer payment apps frequently.2 Younger consumers are also leading the trend in the use of digital wallets across the globe.3 But only 29 percent of online merchants accept mobile wallets for transactions.4 Savvy business owners can use this as part of their merchant services to gain a competitive edge.

An optimal payment solution will also reduce the number of clicks throughout the purchase process. Consumers are less likely to waste time filling out tedious forms just as they are less likely to wait around the front desk. In other words, fewer clicks can lead to more conversions.

Take the first step with PayPal Commerce Platform for Enterprise
  • It’s not wise to make customers wait. Capture more conversions when you speed up transactions with PayPal Checkout.
  • Adopt the latest payment methods. We are the only platform that offers credit and debit, PayPal as well as digital wallets such as Apple Pay and Google Pay.
 

Step 2: Enhance customer lifetime value (LTV)

After optimising the checkout experience, enterprises can capture new customers by taking their e-payment system to the next level. Just as important, enterprises need to ensure these customers keep coming back. As the common saying in business goes, it takes five times more money to gain a new customer than to retain an existing one. Features such as real-time updates, card-on-file and credit options help enterprises to secure repeat business, maximise LTV and increase purchase size.

Going back to our metaphor, repeat customers have moved past the lobby and are looking at the VIP lounge. Convenience affects brand loyalty, so if customers need to re-enter their payment information or repeatedly log in to make monthly payments, their LTV may decrease. To send customers to the “VIP lounge” where they may make more purchases, enterprises require a flexible payment platform which supports recurring payments, secure data storage and automatic updates on card information.

There’s more to the LTV equation than seamless repeat purchases. For example, the value of each purchase matters just as much as the number of purchases. Enterprises offering short-term financing choices which provide consumers with the confidence and flexibility to make a larger purchase give them an added edge.

Secure the second step with PayPal Commerce Platform for Enterprise
  • Automatically update card data at the time of purchase with PayPal’s real-time account updating feature.
  • Store card information securely in our Customer Vault for card-on-file transactions as well as recurring payments and subscriptions.

secure-your-transactions
 

Step 3: Secure your transactions

Unauthorised network access, fraud and chargebacks can affect customer trust. This, in turn, can hurt your revenue. As a result, enterprises need to minimise risk and maximise compliance. In merchant services, a payment platform which incorporates the latest security tools can help businesses safeguard against fraudsters and boost profits.

Fraud is a serious matter and it shouldn’t be overlooked. Excessive chargebacks may prompt card issuers to shut down transactions, thereby threatening your business’ viability. The fight against fraud is a never-ending struggle, and there’s nothing friendly about “friendly” fraud either. In 2020, 57 percent of businesses suffered increasing losses due to fraud compared to the year before.5 Those with sufficient resources mentioned they would rather spend on customer acquisition and retention than security enhancements.

Data breaches can also compromise customer information with serious consequences, such as the Equifax breach in 2017 which exposed the data of 147 million people. Two years later, 383 million Marriott guest records were hacked. These records included sensitive data such as passport numbers and card information. Such breaches, as you can imagine, pose a real danger to business reputations — 20 percent of consumers will refrain from providing data to a merchant who disclosed a hack.6

Progress to Step 3 with PayPal Commerce Platform for Enterprise
  • Leverage PayPal features such as 3D Secure and CVV checks to identify user behaviour patterns to lower fraud incidences and improve authentication rates
  • Manage customer data with the latest encryption, monitoring techniques and network tokenisation to help reduce reputational risk
  • Review transactions regularly for signs of fraud. Driven by Simility technology, PayPal Fraud Protection uses Adaptive Decisioning to make AI-informed decisions to assess fraud risk.
 

Step 4: Enhance your online e-payment system

Changing regulations, outdated technologies and chargeback disputes can add to the rising cost of doing business. By streamlining internal operations, including your online payment system, enterprises can reduce both wasted resources and avoidable expenditures.

Integrating different payment methods for various partners and vendors is a complicated and time-consuming task. Applying separate reporting (or no reporting) can leave companies clueless on how to resolve back-end issues such as system outages or high decline rates. Such issues and challenges not only consume precious time and resources, they may eventually affect sales conversions too.

To improve efficiency, enterprises require tools which enable them to maximise their capacity to accept payments while minimising the required resources. For example, a single e-payment system which handles multiple functions, and one that is agile and scalable to meet customers’ changing demands. An accurate dashboard can reveal what’s happening in the gateway, such that business owners can put an end to high decline rates to capture more sales. In addition, an online e-payment system which sustains a longer uptime also mitigates unforeseen outages, hence allowing enterprises to be there for consumers when they are ready to make a purchase.

Step up to Step 4 with PayPal Commerce Platform for Enterprise
  • PayPal Commerce Platform for Enterprise is dependable, agile and ready to be deployed across nearly any market, including cross border ecommerce applications.
  • Save time and reduce operational worries with our consolidated reporting and disputes API. Through comprehensive unified reporting, you can analyse decline rates, view transaction summaries, examine fees, run settlement batch summaries and prepare custom reports.

scale-with-cross-border-ecom
 

Step 5: Scale with cross border ecommerce

In any business, there are always new challenges to overcome and new global markets to penetrate. Enterprises must navigate different regulatory environments, manage risk and cut costs, while providing customers with the same seamless experience they have come to expect. Essentially, the right payment platform can help your business scale across markets with minimal fuss.

Major compliance standards — PCI, SOC2, PSD2 and 3DS1 — vary from market to market, however, a reputable worldwide payment system changes with them. Local partners, by offering on-the-ground insights, enable enterprises to stay ahead of regulatory shifts while helping them mitigate inherent risks in the global market.

Simply accepting local currencies alone is no longer enough for enterprises, even though they are still vital. To provision for new and seamless market entry, businesses need to offer relevant local payment options as well as globally-accepted digital wallets. And as a result, build relevance and increase customer LTV on a global level.

Complete Step 5 with PayPal Commerce Platform for Enterprise
  • Access a comprehensive network with over 400 million active users worldwide who use PayPal.7
  • Offer customers a secure and trusted way to pay with PayPal, on top of their favoured local payment channels, all via a single e-payment system.
  • Enjoy support from local teams with global knowledge to help you navigate evolving regulatory and compliance landscapes with ease.

PayPal Commerce Platform for Enterprise. We do much more than process transactions and collect fees. We’ll help you examine your payment strategy to discover areas for improvement you never knew were there.
The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.

Sources:

1Mobile POS Payments Worldwide, Statista, November 2019.
2How Consumers Use Peer-to-Peer Mobile Payment Apps, The Manifest, June 2018.
3The Rise of Digital & Mobile Wallets, Merchant Machine, November 2018.
4Mobile Payments in the United States: Statistics & Facts, Statista, October 2019.
52020 Global Identity and Fraud Report, Experian, January 2020.
6Consumer Loss Barometer, KPMG, 2019.
7PayPal Second Quarter 2021 Results, July 28, 2021

Frequently asked questions.

Website Payments Pro – Hosted Solution is a customisable payment system that allows Hong Kong merchants to accept payments funded by all major credit and debit cards. You can create the online checkout experience that’s right for your customers – from branding, look-and-feel, to back-end integration.

Here are some features and benefits of Website Payments Pro – Hosted Solution:
  • Easy integration with popular shopping carts.
  • Keep your customer engaged with your site through the checkout.
  • Accept credit and debit cards in 16 currencies.
  • Accept payments over the phone, fax, or mail orders with Virtual Terminal.
To learn more about the product, fees, and application details, please visit Website Payments Pro – Hosted Solution.
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:

To provide a safer online payment service, our internal security system reviews every transaction before it's released. Generally a withdrawal can complete processing through our system within 2 hours, but sometimes it could be held for up to 72 hours for further review. 

This type of review can happen for various reasons. For example, you may have received a higher-than-usual amount of money into your account, you may be logging in from an unsecure network, or you may have made changes to your account settings recently.

Once our review has finished, your withdrawal will show as "Completed" and will be processed to your bank account if the review didn't turn up any issues.

* 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.
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.