Is PayPal good or bad for your website?

Do customers care?

[add more milk]

So I'm having a debate with my friend on whether using PayPal as a payment method good or bad for an e-commerce website.

His argument is that the PayPal logo and the fact that you have to leave the website to go to PayPal's checkout page makes your website look chessy, less serious and less professional.

But the question is... Do customers really care?

I'm talking about average customers here. Based on my limited observation, most customers can't care less whether they have to pay on PayPal website or on yours. As long as they can place the order and make payment easily, they are happy campers.

In addition, the PayPal logo actually offers trust and familiarity to new online visitors.

Does anyone agree with me? Any statistics on this?

The reason I'm asking this is because I'm building a site that uses PayPal (the regular version, not the Pro) as the payment method. I know I could sign up for the Pro version, but at this early stage I want to launch the site as soon as possible with minimum complexity, cost and time requirement possible.

Thanks.

[seanpecor]

I use Paypal, and have various web sites that target various markets. From low-tech markets to hi-tech markets, Paypal seems to work fine in my experience. I do over $45,000 a month through Paypal on fees ranging from $25 to $1,500. It's worked well for me over the years. Paypal creates the rare technical support issue ("I don't have a Paypal account, but Paypal says I do!"). I've had it in the back of my mind to switch to a more seamless method but Paypal has been so bulletproof for me it's never been a high priority. And now that they're offering their own seamless method that is bound to continue evolving, the transition path looks fairly painless.

Sean

[DryFire]

I would highly recommend that you offer your customers both payment options. (i.e. PayPal as well as a traditional credit card processing aka--> merchant account). Some people love PayPal and some absolutely hate it. It’s a good idea to be able to sell to both types of customers. If you only offer PayPal… you will loose sales.

[seanpecor]

In my case I don't believe offering Paypal exclusively has resulted in any more than a 0.01% loss of sales. However, I don't think that this would be the case if this were the original Paypal, where accounts were required. In that case you'd almost certainly have to offer multiple payment options. But the Paypal of today is quite mature and now offers virtual terminals and seamless transaction processing should you desire it.

I think if you're just starting out and want to test the waters than standard Paypal will work just fine. Just be sure to customize beyond the default Paypal options. If you're just starting out, a standalone credit card processing system can be daunting, and the additional expense of the monthly gateway fees, and hefty transaction fee can eat into your shoestring budget. But if you're very concerned about taking Paypal-only payments and how that might affect your sales then the best route would be to offer multiple payment options. Your fixed monthly expenses will be somewhat higher but you won't have to worry about sales losses.

Sean

[netchicken1]

I would trust my personal credit card details more with paypal (more fool me) than with a website I didn't know the background of.

Despite how good your site looks it could still be run by a scammer from russia. Paypal has instant cred.

[seanpecor]

netchicken1, that's a good point. I wonder how that crowing skepticism will impact online merchants over time as more moms and pops get online and try to roll their own online transaction systems. I know that I go through a mental checklist when shopping a site.... can I find their mailing address.... if not are they a recognizable brand.... does the payment page go off to a strange looking transaction system... etc.

I no longer do web development consulting but back "in the day" I was continually dismayed at how insecure customer credit card data was in databases and so on.

Sean

[LifeinAsia]

Then again, if the site is being run by a Russian scammer, then the "PayPal" site it links to is probably a PayPal phishing site.

[DryFire]

I also like PayPal and would trust them with my data, more than I would some unknown website. But a lot of customers don’t share that same point of view. If you only offer PayPal I can guarantee that you are loosing sales.

[snip] Please keep business offers back in Sticky, even if they are in make in fun [/snip]

-Dryfire

[edited by: minnapple at 2:14 am (utc) on Mar. 30, 2006]

[seanpecor]

Well, I'll say again I do not believe based upon my own analytics that offering only Paypal causes me to lose any more than 0.01% of potential sales. That sales loss doesn't in my case eclipse the increased expense of an additional third party merchant processing solution. Of course, my own customer base is not necessarily representative of the mainstream. My customers are primarily business-to-business, and higher-end business-to-consumer. And, in my case, I offer a highly desirable service that is in short supply so perhaps my customers are more willing to put up with Paypal than someone selling "commodoties"?

The key is to absorb the anecdotal evidence and judge how best to apply it to your own offering. Perhaps the smartest approach would be to streamline your business with Paypal and then later develop - when appropriate - additional multiple payment options. So while you're spinning up you're not paying the monthly merchant processing fees and underutilizing your merchant account.

Sean

[gramski]

I've had a site that was only paypal for several years. I do offer alternatives now but almost all (over 90%) of buyers still use paypal. This is a site that targets individuals/hobbyists not corporate customers so it may be different for other markets but paypals been great for me.

A year or so ago paypal changed their systems so people don't have to sign up to buy and thats really dropped the number of "paypal resistant" customers I have to deal with.

The people who complain about paypal seem to be basing their aversion on historical problems they had in the past rather than anything that is on my site now. Still I don't mind if they want to use other payment methods, thats fine. It seems that once someone's had a problem with paypal they refuse to use it ever again.

[BeeDeeDubbleU]

We had a long discussion about this last month during which nothing was really agreed about Paypal.

[webmasterworld.com...]

[derekwong28]

PayPal accounts for one quarter of all our transactions. I am sure if we had only offered PayPal, we would have lost a lot of customers.

We really want comments from people who used to use PayPal exclusively and then added a merchant account.

[seanpecor]

derekwong28, I've been Paypal-only since '02 and do over 400 transactions a month. In late April I'll be adding support for Paypal Pro and those transactions will take place on my SSL server. I'll report my findings.

Sean

[iggy99]

does pay pal allow / offer recurring transactions (web hosting for instance)?

[seanpecor]

Yes, they support subscription payment models and for each subscription definition you create at Paypal you can alter settings such as billing cycle ('n' number of days, weeks, months, years etc). You can also optionally configure a trial period that lasts 'n' days at 'x' cost, and when the trial period ends the normally configured billing cycle commences.

Sean

[pp_rb]

Yes, you can use PayPal's Subscriptions for recurring payments, but Account Optional checkout is not available for Subscriptions. (Your customers would be required to have PayPal accounts.)