The economic impact of enterprise payment solutions



March 03, 2022

Man wearing a blue blazer writing on a white board with a dry erase board

A Forrester report commissioned by PayPal concluded that PayPal’s enterprise business payment solutions deliver credit card and alternative payment processing services fast and at scale, while enabling high authorization rates.

Forrester's Total Economic Impact™ study shows how a composite organization, based on four customer interviews, enabled the following three-year financial impact, highlighted below. Benefits were found to include new sales, new customers, and cost savings.

Financial summary

After implementing PayPal’s enterprise payment solutions in their own organizations, interviewees reported benefits that went beyond high transaction approval rates. Forrester’s three-year risk adjusted analysis found:

New market opportunities from PayPal partner channels totaling more than $1.8 million

With PayPal, merchants can offer consumers direct purchase options from a partner’s site. This avoids adding further transaction steps and enables consumers to buy on other sites where they are already engaged. The composite merchant in the study saw more than 10% of their transactions coming via partner channels, net new customers they would never have reached otherwise. Forrester estimates the new market opportunities that extended from these PayPal-enabled payments partnerships totaling more than $1.8 million.

New market opportunities from PayPal Wallet totaling more than $1.5 million

The study found that new customer-reach opportunities are enabled by easily adding PayPal Wallet, Venmo and other PayPal family payment options through a single integration with PayPal’s enterprise payment processing solutions. Some 5% of transactions that come from this family of payment options (as opposed to non-PayPal payment methods) were found to be brand-new customers to the merchant, providing new market opportunities that amounted to more than $1.5 million.

Avoided cost benefits totaling $850k

With PayPal’s enterprise solutions, payment processing is simplified and centralized. This added up to 15 hours saved each week for each payment administrator, allowing them to see resource cost savings of $131,000. Merchants also experienced payment-related support cost savings of $465,000 thanks to streamlined payment management and integration. Furthermore, some merchants saw a reduction in transaction fees totaling $254,000 compared to their previous payment ecosystem, especially for credit card transactions.

Total solutions costs of $840k

The transaction costs for net-new sales are calculated based on a conservative transaction fee, adding up to less than $415,000 for the composite merchant. Orchestration software is provided at no additional charge, but resource implementation costs to start transacting through the payment solution added up to less than $425,000.

PayPal Enterprise Solution by numbers

Forrester's Total Economic ImpactTM study found that the composite merchant experiences benefits of $4.20 million over three years, versus costs of $839,000, adding up to a net present value of $3.36 and an ROI of 401%.

45,000 more sales adds up to £3.3 million

New business opportunities brought by PayPal enterprise global payment solutions add up to a present value of $3.3 million.

Existing partnership sales: 250,000

New sales from partner channels: 25,000

Thanks to the opportunity created by easy partner payments integration, the composite merchant (based on representatives from merchants that implemented this solution) saw many transactions coming from partner channels. Forrester estimates that 10% of those sales were net-new customers the merchants would never have reached otherwise.

Existing PayPal Wallet sales: 400,000

New PayPal Wallet sales: 20,000

5% of transactions that come from the PayPal family of payment options (as opposed to non-PayPal payment methods) are brand-new customers to the merchant.

Benefits summary

The study highlights both direct and flexibility benefits that enterprises may realize by deploying PayPal’s enterprise payment solutions.

Direct benefits of PayPal’s enterprise payment solutions

New market opportunities from payments partnerships

The study found that PayPal can help facilitate new business for merchants by unlocking third-party sales channels through payments connections. With this orchestration technology, customers on another site or social platform can buy directly from a merchant without leaving the experience they are engaging with. Data is transmitted securely via PayPal APIs, and payments are processed efficiently without extra pass-through transactions.

New market opportunities from PayPal Wallet

In addition to a range of credit card and local payment methods, PayPal’s enterprise solutions include access to PayPal’s proprietary payment methods and the 400+ million consumers they serve worldwide. This can lead to expanded reach and new business for merchants.

Payment resource cost savings

Merchants experienced cost savings with their integration of PayPal’s enterprise payment processing solutions through a variety of time and cost reductions. These included consolidated payment processing services across regions; reduced developer time to add or update payment types; reduced integration time required to include PayPal wallet and Venmo alternative payments; and reduced time for administration and reporting.

For vendors with multiple payment processors for specific payment types or countries, streamlining to a central system is another time- and cost-saving opportunity.

Help desk cost savings with fewer and shorter support calls

In addition to payment administration and developer time savings, a streamlined payment solution also led to a reduction in payment-related customer support issues. With PayPal’s variety of capabilities, many services were brought in-house, leading to time and cost savings. These included reduced or avoided chargeback disputes, fraud and risk resourcing, and other issues that could lead to a customer support contact.

Reduced transaction fees

Some merchants interviewed realized a credit card transaction fee saving when they compared PayPal’s enterprise payment solutions to their legacy solution. One retailer saw its credit card transaction fees decrease, while another organization highlighted PayPal’s guidance and experience in helping it understand that it could reduce transaction fees compared to its multiple previous payment solutions.

Flexibility benefits of PayPal’s enterprise payment solutions

High approval rates that meet merchant expectations

The Forrester study discovered that merchants can rely on PayPal’s track record of reliability and scale. PayPal supports many large merchants worldwide due to its knowledge, experience and connections as one of the largest merchants of record in the world with its own digital wallet.

PayPal’s enterprise solutions use that experience to authorize a high volume of transactions across various card and alternative payment types. All of the merchants represented by the interviewees chose PayPal in part because of that track record. They were confident that PayPal could support their transaction scale and authorize a high volume of payments.

Explore how PayPal’s enterprise solutions can help your business

Reliable and scalable, PayPal enterprise payment solutions not only solve your immediate payment challenges, they also provide your business with unparalleled opportunities for growth.

Offering more than just high approval rates, having PayPal enterprise payment solutions in place gives you more options which can ultimately lead to increased sales for large enterprises. Taking advantage of partnership opportunities and adding features such as PayPal Wallet extends your reach, giving you access to brand-new customers.

And alongside growth opportunities there are also cost savings to be made. Administration and developer time is reduced, while having a streamlined and reliable payment solution may also reduce customer support issues. New sales, new customers and cost savings – isn’t it time you discovered how PayPal’s enterprise solutions could help your business?

Find out how you can grow and optimize your business with a flexible, end-to-end enterprise payment solution.

Read the full study

Full Forrester TEI Report

Full Forrester TEI Report

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