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

May 08 2020 | PayPal editorial staff

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 surveyed 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
  • 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 2018 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.

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 300 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.
 
 
*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.

If you already have a website, use PayPal Website Payments to accept credit card and bank account payments - all through one provider. You don't need a separate merchant account and gateway. Since you eliminate separate agreements for each payment method, you save time and money.

With PayPal Website Payments, customers can shop on your website and pay on PayPal. This is a quick and easy way to start accepting credit cards online. A simple integration into your website allows your customers to pay securely and easily. Your customers don't even need a PayPal account to make a payment.

You can find more information about the products we offer and how to use them by visiting our Business page.

  1. Go to www.paypal.co.il.
  2. Click Business near the top of the page.

Both PayPal accounts allow you to send and receive payments.

  • Personal: Recommended for casual users/sellers or non-businesses who wish to get paid online, and who also make online purchases.
  • Business: Recommended for merchants who operate under a company/group name. It offers additional features such as allowing up to 200 employees limited access to your account and customer service email alias for customer issues to be routed for faster follow-ups.

With a Personal account, you can:

  • Have PayPal buttons on your website and accept payment with PayPal for low fees.
  • Receive payment via email for low fees.
  • Make secure payments using your credit card, or bank account in the U.S.

A Business account has all the features of a Personal account but adds many services. With a Business account, you can:

  • Operate under your company or business name.
  • Accept credit card, and bank account payments for a low fee.
  • Manage users, allowing you to give separate access rights to each of your employees.
  • Gain access to PayPal products that meet your business needs, such as Express Checkout.
  • Use PayPal Business Setup to set up your account in a short time.

Fees:
If you want to know more about our transaction fees, go to the fees section of our website.

  • Convenience
    When you pay with PayPal, even if you pay on different online shopping sites, you don't need to input your credit card number, and you usually don't need to input your street address for each site and each time you shop.
  • How you can pay
    PayPal payment is supported on many online shopping sites worldwide. All you need to do is add your credit card number to your PayPal account and street address where you want the purchased goods to be sent to. After that, when you purchase goods at shopping websites supporting PayPal, you only need to input your email address and password, and you can check out easily, quickly and safely.
  • Many supporting sites and protection
    PayPal is the standard payment method on eBay, the largest online marketplace in the US. eBay is also present in many countries all over the world. If you pay with PayPal on eBay.com and you don't receive the goods you bought, you may be eligible to be covered by PayPal Buyer Protection and you may get your money back. For further information on PayPal Buyer Protection (including, eligibility) please see our Legal link at the PayPal home page.
  • Easy acceptance of Credit Card payment
    If you are a seller and you support PayPal payment in your own online shopping site, you can receive credit card payments for goods your customers purchase on your website. Introduction of PayPal payment to your website is very easy: just go to the PayPal home page and click Merchant Service under Business.
  • Fees
    For the purchase of goods, the buyer is not charged any fee by PayPal. Receivers of payments are charged low fees as a percentage of the payment. In this respect, PayPal payment has something in common with credit card payments, but fees are typically lower than fees incurred for credit card payments. For details about fees, please see the fees section of our Legal section, or click Fees at the bottom of any PayPal webpage.

After you send a payment for goods and services with PayPal, the recipient receives an email notification of your payment. After clicking on the link included in the email, the recipient can log in to PayPal or sign up for a new account. The payment will immediately appear in his account balance.

Note:
PayPal members need to confirm their email address before the payment will be credited to their PayPal account.

* 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.