A question that we get asked regularly by our clients when building an ecommerce website is whether they should use PayPal or direct card processing for their online payment processing.
The simple answer we like to give is both! But for smaller companies, and those just breaking into ecommerce for the first time we always ask them to look at the advantages PayPal offers.
When thinking about online shopping it is important to remember why people actually shop online. It is amazing how far online shopping has come; it is now a part of every-day life compared to when it was first available. The main advantages of online shopping are convenience and price; and now with the advent of mobile ecommerce it’s becoming uber-convenient!
So where does PayPal fit into this scenario then? Well, PayPal is extremely convenient, as users do not need add their card details repeatedly. But the really big one to remember here is that people trust PayPal. They know that if something goes wrong they will get their money back via the PayPal Dispute Resolution service. And if there is any fraud they are covered.
PayPal have also worked hard to make sure that they have mobile payment solutions that work. They are also heavily aligned with the fastest growing ecommerce platform on the planet – Magento, so there is no need for complex configuration or coding. It’s out of the box, baked into Magento!
We’ve all seen how web site use visual cues such as security icons on websites such as padlocks. And it’s important to add these to continue the trust story. But guess what? Having the PayPal accepted here icons on your web site will generate far more trust from users that have never traded with you before. Think about it, you’ve done a great job building your site, and you’ve got your pricing right. Users find you using Google searches and come to your site. They don’t know you. Ok you are £1 cheaper than the big brand, but you only process credit/debit card payments through a payment processor. Chances are the customer is going to bail in favour of the big brand. Having PayPal accepted here would make the customer more likely to give you a go.
Before introducing PayPal it is worth to take into consideration a few things:
- The costs involved; PayPal can be slightly more expensive than other payment methods. Transactions can cost between 1.9% – 3.9% + 20p dependent on the total amount of monthly sales.
- Look at your competition, what payment methods they are offering?
- Remember despite its popularity, there are still people that don’t like PayPal. Make sure you have alternatives if you are serious about ecommerce.
To answer the question about which payment option to chose, our answer is both!
Websites that provide both PayPal and a credit card payment gateway on average have around a 30% higher conversion rate than websites that only offer one option.
And remember, if you are not known by the customer PayPal could clinch that all important sale!