How to get set for online success in 2021
As we enter a new year, what can you do to have the best chance of online success in 2021?
1. Consider how customer behaviour has changed.
The pandemic has caused people to change their shopping behaviour in 2020 and will likely affect how we behave in 2021. As you plan for next year, think about how these factors may affect your business:
- More online shopping – Shopping online has increased by 70% in Asia-Pacific, more than doubled in the US and increased 50% in Europe.1
- More online gifting – Unable to visit distant loved ones, people are shopping and sending gifts online and overseas for big holidays and celebrations like Valentine’s Day, Chinese New Year, Diwali or Three Kings’ Day.
- Greater desire for convenience and caution – Shoppers are using home delivery and click-and-collect to stay home and stay safe.2
- Concern for bargains and essentials – Shoppers are more focused on essential goods rather than luxuries and looking at value-for-money rather than brand loyalty.3, 4 Nearly half of shoppers in India and South Korea say they are changing to less expensive products.5
- Community, connection and caring – The pandemic has also made people feel more connected with their local communities and concerned about the values and purpose of the brands they buy.6
2. Plan ahead for success.
A little planning can save you wasted money and missed opportunities. For many businesses, 2020 was all about reacting to the pandemic. As we look to 2021, how can you be better prepared for continuing disruption or for an improving business situation? Consider the following:
- Create a financial plan or budget – You can’t build a successful business without understanding your costs, sales and profit. Use accounting software or a spreadsheet to create a plan of your sales by month, your fixed costs (like rent, website hosting etc) and variable costs (like shipping, marketing etc).
- Consider your cashflow – Plan ahead for your cash needs and, if necessary, explore funding solutions for your working capital requirements.
- Create What-If scenarios – A good approach to risk management is to create alternative budget scenarios: what if my sales are 10% lower than I planned? 20%? What if my costs increase by 5%? These can help you prepare for the unexpected.
- Write a marketing plan – A simple marketing plan will help you decide which countries and holidays to target, which selling methods you plan to use, which products you’ll promote and how much you plan to spend on each.
- Plan for the worst – Check that you have adequate cash reserves in case of another poor year and ensure you have a business continuity plan to help you cope with the unexpected.
As you plan for 2021, also think about your business and its role in the community. Everyone’s been hard hit and customers want to know that you’re there to help, so consider how you might invest in your community, or enter local partnerships to help your community thrive.
3. Build a strong mobile and digital footprint.
Get your website ready. Make sure your website is up-to-date and optimised for the new normal of increased online sales and cross-border customers. Nearly three quarters (73%) of shoppers now use mobile devices,7 so also make sure your site and payment process are optimised for customers using small touchscreens. This article is full of tips on how to optimise your site, from fixing the basics to including the information customers need to buy from you.
Help people pay the way they prefer. One of the most important things you can do to improve your site is to streamline your checkout process, especially for mobile users and international customers.
No-one likes typing card numbers and personal details on a tiny touchscreen, so use an option like PayPal Checkout that minimises the input required from your customers. Displaying PayPal Checkout buttons on your homepage and every product page can also make it easy for customers to complete a purchase without getting distracted. Be sure to meet the needs of international customers. One in five shoppers8 will abandon a purchase if they can’t pay the way they prefer. Online shoppers are significantly more likely to buy abroad if they can do so in their own currency,9 so select a payment solution that helps you display prices in your shoppers’ local currency.
If you need a website, consider starting with an e-commerce website builder or an ecommerce platform. This may be a faster way to get a website up and running compared to creating and coding one from scratch. PayPal is built into many ecommerce platforms so that you can easily set up the store you need with a trusted payment provider. These include Magento, Shopify, WooCommerce and Wix.
4. Gain Reach with new markets and channels.
Finding new markets. Cross-border online sales are growing at twice the rate of domestic online sales.10 People are looking for new brands and ways to send gifts. That means it could be a good time to target new customers in other countries.
Start by thinking creatively about which holidays best match the customers and products you already have. For example, if you have many customers in China, creating a promotion for Chinese New Year may be a good idea. If you sell dressing-up costumes, think about targeting Mexico’s Day of the Dead (Día de los Muertos) or Halloween.
Finding new channels. Do you already sell online or are you just getting started? Maybe you’re unsure whether selling online is right for your business? Or, perhaps you only sell on a single marketplace (like Alibaba or Flipkart) or social platform.
It’s worth exploring as many ways to reach your customers as possible: on your own website, different marketplaces, and a range of social media channels. Look for the places that best match your products and markets. For example, Etsy is a very popular marketplace worldwide for craft goods, while Flipkart is the biggest marketplace in India. Social media like Instagram and Facebook marketplaces are great for visual products while LinkedIn is targeted towards businesses.
You may find this article useful as you think about ways to increase your online reach.
Social media. People are spending more time at home scrolling through their social feeds, making this a good way to engage with customers and be part of their conversations. If you don’t use social media for your business, then think about testing 1 or 2 platforms. Customers also use social media to send direct messages, so turn on your auto-replies during busy periods to manage customer expectations. Always respond to comments and inboxes daily and encourage followers to share their opinions on your post. Find small tactics that help you connect with your audience in a human way.
5. Build customers’ trust.
Shoppers may not have heard of your business before, but you can build trust by showing the names that you do business with. Letting people know, right from your homepage, that you accept payment by PayPal is one example. Other trust signs include security badges (like SSL certification), membership of professional bodies and third-party endorsements. These signs are important when you sell to customers in different countries. The pandemic has made shoppers more aware of health and safety matters so use your website to share the safety measures that you’ve put in place, such as contactless menus and payment, or click-and-collect for local customers. You can also build confidence by being transparent with the information a customer might wish to know and making it easy to find. For example:
- Contact information
- Returns policy
- Shipping
- Full and fair product descriptions
- Customer reviews
6. Revisit your marketing.
A lot has changed recently, so review and update your digital marketing activities for 2021.
Start with empathy – Show the humans behind your brand, share authentic stories and re-evaluate the images, language and tone of voice (on web and social) to ensure they are compatible with customers’ concerns. Think about responsible marketing and how your business could support the local community.
Get creative with your marketing – Try new tactics. For example, use video or online training, think about online events or start a blog. These can help you build relations with your customers.
Social and digital strategies – Consider how paid online ads could help you reach new customers, even in new markets.
Search engine optimisation (SEO) – If you have a website, then review your SEO carefully, optimising your homepage and product pages to reflect how search trends and shopping behaviours have changed. For example, terms like “open now”, “near me” and “deliveries” are important when customers are not travelling far.
Automate your marketing – Explore marketing automation solutions that can help recover shopping cart abandonment, for example by sending an email reminder to recent shoppers on your site.
As we enter 2021, keep your strategies agile so that you can change quickly as market conditions change. Also, consider how much time and staff you need to manage online aspects of your business including updating website content, SEO & remarketing tactics.
How PayPal can help you get set for success in 2021.
PayPal helps you become a global business that can connect with over 340 million PayPal customers in over 200 markets around the world.
It’s also easy to integrate into your existing ecommerce site. Some payment solutions are complicated and time-consuming to implement but, with PayPal Checkout, all that’s required is one integration and PayPal keeps it up to date from there. It can be as simple as copy/pasting a line of code which you or your developer can do. Or you can easily integrate it on your shopping cart through an e-commerce platforms if you’re not technically minded.
PayPal Checkout can help you get set for online success in 2021.
Not on PayPal yet? Sign up now and get PayPal Checkout for your site.
To get started with PayPal Checkout
[2] Nielsen (2020), How Americans are shopping during COVID-19, https://www.nielsen.com/global/en/consumer-insights-for-fmcg-retail-manufacturers-coronavirus-covid-19/how-americans-are-shopping-during-covid-19/
[3] McKinsey & Company (2020), Consumer sentiment is evolving as countries around the world begin to reopen, (a study of consumer sentiment across 42 countries, June 2020), https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-behavior-is-changing-amid-covid-19
[4] Bazaarvoice (2020), Behavior that Sticks, https://www.bazaarvoice.com/resources/behavior-that-sticks-understanding-the-long-term-shopping-trends-driven-by-covid-19/
[5] McKinsey & Company (2020), Consumer sentiment is evolving as countries around the world begin to reopen
[6] Accenture (2020), COVID-19: How consumer behavior will be changed, https://www.accenture.com/gb-en/insights/consumer-goods-services/coronavirus-consumer-behavior-research
[7] PayPal (Q3 2019), Ipsos commissioned by PayPal, Mobile Commerce Research, an 11 market survey (UK, France, Germany, Italy, Spain, Australia, India, Japan, US, Mexico, Brazil) with approximately 22,000 consumers and 4,602 business respondents to examine how people shop online.
[8] PayPal (2019), PayPal mCommerce Study. On behalf of PayPal, Ipsos interviewed a quota sample of c.2,000 (22,000 total) consumers (aged 18-74) who owned or used a smartphone and c. 300-500 (4,602 in total) business influencers or decision makers who sell or take payments online to Consumers (and businesses) in 11 countries (UK, France, Germany, Italy, Spain, Australia, India, Japan, US, Mexico and Brazil). Interviews were conducted online between July 23 and August 25, 2019. Data was weighted in Australia on age and income to replicate study conducted previously. No other weighting was applied. https://www.paypal.com/stories/us/paypal-mcommerce-study-mobile-trust-social-buying-top-of-mind
[9] PayPal commissioned Ipsos MORI PayPal Insights 2018. n=34,000, 31 markets. Online survey of adults (aged 18+) between March — May 2018.
[10] OECD (2020), Connecting Businesses and Consumers During COVID-19: Trade in Parcels, https://www.oecd.org/coronavirus/policy-responses/connecting-businesses-and-consumers-during-covid-19-trade-in-parcels-d18de131/
Frequently asked questions.
As you begin your selling journey, or start selling after a while, we hold the initial payments you receive for up to 21 days. This is a common industry practice to cover any potential buyer complaints that may happen in that time.
We review sellers' accounts each month to see if some/all sales proceeds can become available immediately. Once you build a positive selling history on your account and confirm your identity, we’ll give you access to your money faster.
You’ll be able to request an increase, once a month, in the amount immediately available to you in each calendar month, once you:
- Confirm your bank account or debit/credit card
- Confirm your phone number
We’ll also ask you to complete some or all of the following:
- Reach a specified number of sales/orders
- Receive a specified total amount from sales
- Receive no buyer disputes for a specified number of days
What exactly is PayPal changing?
PayPal historically supported the capability for some merchants to allow users to amend orders in the context of checkout to add (or remove) services like shipping fees or taxes. While the user consents to the final amount in the merchant Checkout, this wasn't completed in a session with PayPal.
Example:
Merchant sends the buyer to PayPal to authorize a transaction of 100.00 EUR.
Consumer reviews and authorizes the transaction at PayPal for 100.00 EUR.
Consumer returns to the merchant site where the transaction amount increases to 110.00 EUR due to the addition of shipping, taxes, FX conversion, etc.
Effective April 2022, PayPal will obtain an authorization from each customer for the maximum amount of transaction before redirecting a customer to the merchant. If the merchant captures more than the authorized amount, the transaction will be declined.
This will impact all global merchants (for both domestic and international transactions) that sell to PayPal buyers from the countries subject to PSD2 (i.e., EEA).
Why is PayPal making this change?
Strong Customer Authentication (SCA) requirements, which are part of the Second Payment Services Directive (PSD2) mandate additional authentication measures and restrictions to be performed on electronic transactions involving consumers (buyers) from the PSD2 countries.
The changes are in response to the below principles set by The European Banking Authority (EBA) for transactions where the final amount is unknown.
The final transaction amount can't be higher than the authenticated amount: “If the final amount is higher than the amount the payer was made aware of and agreed to when initiating the transaction, the payer’s PSP shall apply SCA to the final amount of the transaction or decline the transaction.”
The final transaction amount may be lower than the authenticated amount: “If the final amount is equal to or lower than the amount agreed in accordance with Article 75(1) of PSD2, the transaction can be executed and there is no need to re-apply SCA, as the authentication code would still be valid in accordance with Article 5(3)(a) of the [RTS].”
What regions are impacted?
This impacts Merchants globally (for both domestic and international transactions) selling to buyers from the EEA (PSD2 countries).
My business is not based in EU, why do I have to comply?
Any merchant who is selling to buyers from the EEA region (PSD2 countries) will be impacted. The impact is determined on the consumers (or buyers) country and not on the merchant country.
Does this impact all my PayPal, Venmo, Braintree transactions?
The current impact is only on PayPal wallet transactions, i.e. merchants who are integrated on PayPal Branded XO. This can be direct PayPal integration or through Braintree. There's no impact for Venmo transactions because Venmo is not offered to EU consumers.
For direct card transactions (Unbranded DCC), the card issuer will automatically be rejecting transactions above what was approved by the consumer during the 3DS review.
When will this change take effect?
PayPal is perusing a slow ramp starting from April. Some merchants may start seeing declines for sales to buyers where PSD applies, if the final captured amount is more than the buyer authorized amount.
I over charge regularly as part of my business model, what should I do now?
To minimize the declines, PayPal will leverage in-house machine learning algorithm estimate for a higher amount and authorization the consumer for the same. Only if the merchant requested amount is higher than the estimated authorized amount would the transaction be declined.
In case of a decline, PayPal would be returning an existing error code (refer below table) requesting the merchant to send the buyer for a re-review and this review would happen with the new amount. Post the successful buyer review the merchant can reattempt the capture.
In future, we encourage you to initiate the transaction with an amount inclusive of shipping, tax, etc. so that PayPal wouldn't have to decline the transaction later during the payment lifecycle.
Decline Error Codes When Requested Amount Exceeds What Was Consented
Legacy NVP & SOAP integrations
DoExpressCheckoutPayment API | Error Code: 10486 SHORT: This transaction couldn't be completed. LONG: This transaction couldn't be completed. Please redirect your customer to PayPal. |
DoAuthorization API DoReauthorization API DoCapture API | Error Code: 10610 SHORT: Amount limit exceeded. LONG: Amount specified exceeds allowable limit. |
Payments V1 integration
POST /v1/payments/payment//execute | HTTP Code: 400 Name: PAYER_ACTION_REQUIRED Message: Transaction cannot be completed successfully, instruct the buyer to return to PayPal. |
POST /v1/payments/orders//authorize
POST /v1/payments/authorization//reauthorize | HTTP Code: 400 Name: AUTHORIZATION_AMOUNT_LIMIT_EXCEEDED Message: Authorization amount exceeds allowed order limit. |
POST /v1/payments/orders//capture
POST /v1/payments/authorization//capture | HTTP Code: 400 Name: CAPTURE_AMOUNT_LIMIT_EXCEEDED Message: Capture amount specified exceeded allowable limit. |
Orders V2 and Payments V2 integration
POST /v2/checkout/orders//capture
POST /v2/checkout/orders//authorize
POST /v2/checkout/orders//save | HTTP Code: 422 Error: UNPROCESSABLE_ENTITY Error Description: The requested action could not be performed, is semantically incorrect, or failed business validation.
Issue: PAYER_ACTION_REQUIRED Issue Description: Transaction cannot be completed successfully, instruct the buyer to return to PayPal. |
POST /v2/checkout/orders//authorize
POST /v2/payments/authorizations//reauthorize | HTTP Code: 422 Error: UNPROCESSABLE_ENTITY Error Description: The requested action could not be performed, is semantically incorrect, or failed business validation. Issue: AUTHORIZATION_AMOUNT_EXCEEDED Issue Description: Authorization amount specified exceeded allowable limit. Specify a different amount and try the request again. Alternately, contact Customer Support to increase your limits. Overcharges are not allowed for consumers from PSD2 countries due to local regulations. |
POST /v2/payments/authorizations//capture | HTTP Code: 422 Error: UNPROCESSABLE_ENTITY Error Description: The requested action could not be performed, is semantically incorrect, or failed business validation. Issue: MAX_CAPTURE_AMOUNT_EXCEEDED Issue Description: Capture amount exceeds allowable limit. Please contact customer service or your account manager to request the change to your overcharge limit. The default overage limit is 115%, which allows the sum of all captures to be up to 115% of the authorization amount. Overcharges are not allowed for consumers from PSD2 countries due to local regulations. |
Do I need to make any integration changes?
No immediate integration change is needed, as long as merchant is redirecting the buyer back to PayPal for a re-review in the event of PayPal declining the transaction with the above-mentioned error codes.
What is PayPal doing to reduce impact to my business?
PayPal would use inhouse algorithms to detect impacted merchants, compute the potential overage for the transaction and disclose maximum amount (cap) to the consumer during payment authentication on PayPal.
The computation of the overage is based on multiple factors like transaction amount, previous overage trends, zip code of the consumer and merchant, etc.
Once the consumer consents to the higher amount cap at PayPal, the merchant would able capture up to that amount.
If the merchant requested capture amount exceeds the consumer consented maximum amount, then PayPal would decline the request using existing error codes and the merchant would need to send the consumer to PayPal for a rereview or attempt a capture with the previously approved amount.
How do I know what over charge threshold PayPal have presented to my customer?
Merchant won't have visibility on the maximum amount threshold their customers will be presented with.
If a payment is declined, what should I do?
What error codes will I receive?
We're reusing existing Decline error codes when the requested amount exceeds what was consented by buyer. Details below:
Legacy NVP & SOAP integrations
DoExpressCheckoutPayment API | Error Code: 10486 SHORT: This transaction couldn't be completed. LONG: This transaction couldn't be completed. Please redirect your customer to PayPal. |
DoAuthorization API DoReauthorization API DoCapture API | Error Code: 10610 SHORT: Amount limit exceeded. LONG: Amount specified exceeds allowable limit. |
Payments V1 integration
POST /v1/payments/payment//execute | HTTP Code: 400 Name: PAYER_ACTION_REQUIRED Message: Transaction cannot be completed successfully, instruct the buyer to return to PayPal. |
POST /v1/payments/orders//authorize
POST /v1/payments/authorization//reauthorize | HTTP Code: 400 Name: AUTHORIZATION_AMOUNT_LIMIT_EXCEEDED Message: Authorization amount exceeds allowed order limit. |
POST /v1/payments/orders//capture
POST /v1/payments/authorization//capture | HTTP Code: 400 Name: CAPTURE_AMOUNT_LIMIT_EXCEEDED Message: Capture amount specified exceeded allowable limit. |
Orders V2 and Payments V2 integration
POST /v2/checkout/orders//capture
POST /v2/checkout/orders//authorize
POST /v2/checkout/orders//save | HTTP Code: 422 Error: UNPROCESSABLE_ENTITY Error Description: The requested action could not be performed, is semantically incorrect, or failed business validation.
Issue: PAYER_ACTION_REQUIRED Issue Description: Transaction cannot be completed successfully, instruct the buyer to return to PayPal. |
POST /v2/checkout/orders//authorize
POST /v2/payments/authorizations//reauthorize | HTTP Code: 422 Error: UNPROCESSABLE_ENTITY Error Description: The requested action could not be performed, is semantically incorrect, or failed business validation. Issue: AUTHORIZATION_AMOUNT_EXCEEDED Issue Description: Authorization amount specified exceeded allowable limit. Specify a different amount and try the request again. Alternately, contact Customer Support to increase your limits. Overcharges are not allowed for consumers from PSD2 countries due to local regulations. |
POST /v2/payments/authorizations//capture | HTTP Code: 422 Error: UNPROCESSABLE_ENTITY Error Description: The requested action could not be performed, is semantically incorrect, or failed business validation. Issue: MAX_CAPTURE_AMOUNT_EXCEEDED Issue Description: Capture amount exceeds allowable limit. Please contact customer service or your account manager to request the change to your overcharge limit. The default overage limit is 115%, which allows the sum of all captures to be up to 115% of the authorization amount. Overcharges are not allowed for consumers from PSD2 countries due to local regulations. |
This is going to impact my merchant significantly. Can my business be excluded?
What reporting is available for me as a business to monitor the impact of increased declines?
No new dashboards have been built as part of this program.
I need technical support; how do I access it?
Please reach out to your Customer Success Manager/Integration Engineer/Customer Service for support.
You can learn more about the second Payment Services Directive (PSD2) regulation here.
One-time/once only payments will still go through as always and aren’t impacted by this regulation. Eligible transactions are covered under Buyer Protection.
Learn more about how to cancel existing automatic payments.
This regulatory change won’t affect the automatic payments from international customers. You can also continue to receive payments for one-time/once only transactions from customers who use a PayPal India account.
I’m a freelancer, merchandise/service exporter/merchant registered with PayPal to receive international payments into my Indian bank account. Will this get impacted?
No. There’s no impact to the international payments into your Indian bank account that you receive via PayPal for sales/export of goods and services.
Congratulations on receiving your recent sale!
We’re excited you’ve chosen PayPal to process your payments. Let’s get started with how selling on PayPal works, what you should expect and how we manage access to your money as you get started.
As a new seller or someone who hasn’t sold in a while, we want to ensure you’re able to serve your customers with the high standards they deserve. At the same time, we want to protect you, as a seller, as you navigate how payments work. We therefore require that you confirm your identity and monitor your performance as a seller. As you begin your selling journey, or start selling after a while, we hold the initial payments you receive for up to 21 days. This is a common industry practice to cover any potential buyer complaints that may happen in that time.
How do I get access to my money?
We review sellers' accounts each month to see if some/all sales proceeds can become available immediately. Once you build a positive selling history on your account and confirm your identity, we’ll give you access to your money faster.
I have access to some money instantly, how can I get access to more?
You’ll be able to request an increase, once a month, in the amount immediately available to you in each calendar month, once you:
- Confirm your bank account or debit/credit card
- Confirm your mobile phone number
We’ll also ask you to complete some or all of the following:
- Reach a specified number of sales/orders
- Receive a specified total amount from sales
- Receive no buyer disputes for a specified number of days
How do I get my payments released sooner?
In some cases, you might be able to help to release your held payment(s) sooner. Check your account for more details.
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