Chances are, you know that PayPal allows people to easily manage and move money online. And if you have an online store, you know that PayPal can be a quick, convenient payment option for potential customers. But you may not have enabled PayPal on your store because let’s face it: enabling PayPal means transaction fees, and you may not feel you’ve got the sales volume to warrant that kind of expense creeping in on your margins.
But if you’re selling anything online, you’re probably aware of your checkout conversion rates (i.e. how many visitors to your website actually completed a purchase of your product). Online retailers and sellers live and breathe by this metric, and there are literally thousands of articles online that help online merchants attempt to optimize it. Making the checkout experience as quick and simple as possible results in much higher checkout conversion rates and ultimately, much higher online sales.
That’s why we had to share some insights we recently uncovered from our wealth of merchants who use Volusion for their ecommerce solution. During October of last year, during peak holiday season, Volusion merchants with PayPal enabled earned over 650% more in revenue than those without. That amounts to $100K in sales versus $15K! So why this disparity in success?
PayPal Streamlines the Checkout Experience
The average e-shopping cart abandonment rate is 69%, as estimated by Baymard Institute. That means almost 3 out of every 4 shoppers that begin the checkout experience in an online store will likely abandon their cart rather than completing a purchase. There are an infinite number of reasons why a shopper may get cold feet, but the bottom line is: the more clicks and keystrokes it takes to checkout, the more opportunities you are giving shoppers to change their mind.
The more clicks and keystrokes it takes to checkout, the more opportunities you are giving shoppers to change their mind.
PayPal speeds up the checkout process by auto-populating shipping and billing information, eliminating crucial clicks and keystrokes from the checkout process. A PayPal user enters this once when they create a PayPal profile and never have to enter it again, no matter what online store they shop on.
PayPal also gives customers the option to use PayPal Credit (only available in the U.S.), which makes it even easier for shoppers to buy exactly what they want. In fact, roughly 25% of PayPal Credit users said they wouldn’t have made their most recent purchase if PayPal Credit wasn’t available, and nearly 40% of PayPal Credit users say they spent more online because of the financing.
On top of the speed, simplicity and accessibility, we found that PayPal also gives shoppers confidence in their purchases by providing them with a reliable, trusted payment method. In other words, if they see PayPal, they know their payment information will be in good hands.
PayPal Isn’t Just Simpler for Shoppers, It’s Also Simpler for Merchants
Additionally, a PayPal Credit transaction works just like a credit card in that it lets you get paid up front, while still giving customers time to pay. Meaning, you can track and manage your revenue in real-time, rather than waiting for payments to come through later. PayPal even found that PayPal Credit users’ transactions are up to 68% larger than regular credit/debit purchases, making your payday potential even bigger.
Is PayPal Right for You? Factoring in PayPal Transaction Fees
We realize that activating PayPal also means you need to factor in the transaction fees. So we created this PayPal Fee Calculator to help you determine whether the increase in conversion rates is worth the transaction fees you can expect. Better yet, you can use this tool to factor in these fees to know how much you should charge your shoppers so you can maintain your profit margins.
In a nutshell:
Enabling PayPal as a payment option in your shopper’s check out experience is a sure-fire way to increase conversions. It simplifies their experience, but you’ll need to factor in the transaction fees to know whether it’s right for you.
If you’re already a Volusion merchant and you’re ready to enable PayPal Express Checkout, we’ve got the step by step instructions laid out for you here. You are just a few minutes away from increasing your checkout conversion rates.
Have any questions about PayPal? Let us know in the comments!