Forrester TEI: 2022 Study of PayPal’s Enterprise Payment Solutions

Cost savings and business benefits for enterprises, enabled by PayPal.

Forrester Consulting conducted a Total Economic Impact (TEI) study to examine the potential return on investment enterprises realize by deploying PayPal’s payment solutions. Download the full report below.

Executive summary

PayPal’s enterprise solutions deliver enterprise-level credit card and alternative processing services fast and at scale while enabling high authorization rates. Merchants can offer PayPal’s proprietary payment methods as well as host of other payment methods like digital wallets and other local payment methods. PayPal can enable new sales through partner channels with its unique orchestration technology, sales lift from new customers by leveraging the PayPal’s family, and payment-related cost savings.

Merchants must not only sell goods and services online but also provide consumers a quick, easy, and hassle-free buying experience. Merchants expect a payment provider to deliver services that can have global reach and meet moments of peak shopping demand. Customers increasingly expect new, seamless buying experiences. Forrester research estimates that more than 71% of U.S. online adults and 82% of Western Europe online adults will make an online purchase in 2021, and online buyers will spend an average of more than $2,500 per year.¹

PayPal’s enterprise payment solutions, powered by Braintree technology, deliver enterprise-level credit card and alternative payment method processing services, and easily integrate with other payment processing services. Merchants see fast transaction processing on a solution that can support enterprise scale in more than 50 countries across more than 130 currencies worldwide. It supports a high volume of credit card processing, as well as high authorization rates on the first try. Merchants can offer popular PayPal payment options, PayPal wallet and Venmo, as well as many region- and country- specific payment types and other leading digital wallets that customers in those markets prefer and find convenient.

Key findings

• Additional market opportunity with increased PayPal integration amounting to $1.5 million. New customer reach opportunities are enabled by easily adding PayPal wallet, Venmo, and PayPal’s other family payment options through a single integration with PayPal’s enterprise solutions. Some consumers prefer these payment options for online purchases, and PayPal is also able to provide some co-marketing opportunities reaching its customers via in-app and email channels.
• New market opportunities from PayPal-enabled payments partnerships totaling more than $1.8 million. With PayPal, merchants can provide consumers direct purchase options from a partner’s site. Merchants can avoid adding transaction steps, allowing consumers to buy where already engaged. With the opportunity created with easy partner payments integration, the composite merchant saw many transactions coming from partner channels, estimating that 10% of those sales were net-new customers they would never have reached otherwise.
• High approval rates that meet merchant expectations. Along with the scale and breadth of the solution, high authorization rates for legitimate transactions were a key driver for the selection of PayPal’s enterprise payment solutions. High approval rates at global and local scale meet the expectations of both larger and midsize merchants, enabling value through partner and PayPal channels as well as through higher approval rates compared to some merchants’ previous payment solutions.
• Resource cost savings of $131,000 with streamlined payment management and integration. With PayPal’s enterprise solutions, payment processing is simplified and centralized. This added up to 15 hours each week for each payment administrator or developer – a team of three for the composite merchant.
• Payment-related support cost savings of $465,000 with streamlined payment management and integration. Merchants can leverage easy integration to easily offer PayPal wallet, Pay Later, Venmo, and other alternative payment types. Central management, improved reliability, and reduced reliance on pop-up windows in the payment process all help to reduce customer support contacts.
• Transaction fee savings of $254,000. Some merchants saw a reduction in transaction fees compared to their previous payment solution, especially for credit card transactions. For the composite organization, this adds up to a reduction of 0.025 percentage points.
• An enterprise-ready and global payment solution that enables growth. Merchants can count on flexibility for future growth plans, easily expanding to new markets on PayPal’s extensive global network. The solution supports many protected local payment alternatives that are popular with consumers in their respective countries. In addition, future opportunities to add more payment alternatives from PayPal such as PayIn4, PayPal Credit, and others can add up to further incremental sales.
• Ecommerce payment expertise that adds value for merchants. PayPal’s experience and support has helped merchants quickly implement PayPal’s enterprise solutions. It has also provided valuable advice, such as helping one merchant understand that vaulting with multiple payment vendors was unnecessarily costly — streamlining and reducing transaction costs for that merchant

Analysis of benefits

Direct benefit: New market opportunity from the 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.

Direct benefit: New market opportunity from payments partnerships

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. The director of strategic finance for the online event management services company attributed 10% to 15% of their year-over-year growth to these third-party payments connections.

Flexibility benefit: High authorization rates

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.

Direct benefit: Payment resource cost savings

Merchants experienced cost savings with their integration of PayPal’s enterprise 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.

Direct benefit: 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.

Direct benefit: Reduced transaction fees

With PayPal’s enterprise solutions, some merchants have realized a credit card transaction fee savings compared to their legacy solution.

Additional unquantified benefits

Additional benefits that merchants experienced but were not able to quantify include:

• PayPal’s scalability and reliability helped enable business growth — or at least did not block business growth from happening compared to payment solutions that can’t scale as greatly.
• For the nonprofit, PayPal’s robust and scalable solution helped enable a successful mobile app launch; the solution supported any increased transactions from the mobile app and was easier than expected to develop.
• PayPal’s own expertise helped one merchant uncover even greater value with consultative support and identifying expensive legacy solutions.
• PayPal met the needs of business for the interviewees’ organizations: It provided a high approval rate, supported credit card and many alternative payment types, and reached most countries needed to conduct business, greatly reducing the need to engage with multiple payment processors.
• PayPal’s enterprise solutions enabled more efficient compliance with regulatory support for know your customers (KYC) and anti-money laundering (AML).