For small businesses, PayPal can be a great way to start processing payments simply. It’s easy to set up and you don’t have to worry about lengthy applications or technical integrations. In most cases, you’ll be able to start accepting payments the very same day! This makes it an appealing option for entrepreneurs trying to get their business off the ground as quickly as possible.
However, as businesses grow, many merchants soon find that PayPal just isn’t enough. The fact is, payments become a lot more complex as you scale up and PayPal struggles to support businesses whose needs are getting more complex. At that point, it may make sense to switch to a more robust payments solution.
Here are four reasons why PayPal may be holding your business back.
One of the main growth opportunities for ecommerce businesses is the ability to tap into the global marketplace. With international ecommerce being worth an estimated $2 trillion, there has never been a better time for merchants to reach customers all over the world.
To do that effectively, you need to provide customers with a smooth payment experience that is optimized for local preferences. PayPal does offer some basic localization features, but they are nowhere close to offering an ideal customer experience.
Specifically, PayPal localization falls short in three areas:
A recent study by WorldPay found that price is the number one reason for online shoppers to abandon a purchase. Thirteen percent abandoned purchases when prices were shown in a foreign currency and 56% did so when presented with unexpected costs – two common issues with cross-border transactions.
PayPal does provide multi-currency support, but it cannot effectively address the second issue, as it does not allow you to adjust product prices by country. This is a serious disadvantage because the perceived value of your products can vary widely across regions, due to:
For all these reasons, your payments solution should allow you to set different prices for each country, so as to align closely with local pricing expectations.
Offering a checkout experience in your customer’s native language can improve conversions significantly.
PayPal includes support for checkouts in eight major languages. While this is better than nothing, it definitely falls short of providing a genuinely localized experience in many regions. In contrast, a true global payments solution like Origins Ecommerce supports 24 different languages, allowing our clients to match linguistic preferences for more than 95% of the online global market.
While credit cards account for 75% of online purchases in North America, they are not always as commonly used in other parts of the world. An important aspect of localization is allowing customers to pay with the most popular options in their country.
PayPal only supports major credit cards and direct bank transfers. While this is a good start, it is not ideal in many regions. For instance, Alipay is a preferred online payment option in China, since it provides increased security in a country with weak consumer protection laws. In other regions, customers might also prefer to pay with less common credit cards like JCB or Diners Club.
Since 1 in 6 customers abandon purchases if their preferred option is unavailable, it’s important to provide these alternatives.
In ecommerce, knowledge is power, and getting into the mind of your customer is critical to the success of your business.
Whenever a prospective customer visits your website or makes a purchase, they leave behind a trail of digital breadcrumbs that can allow you to better understand their needs, and how well you are serving them. When collected and utilized effectively, this data can give you a significant advantage over the competition.
There are two main types of data an ecommerce business should monitor: sales data and payments data.
Sales data includes everything that contributes to an understanding of buying behavior, including:
This data is essential for maximizing conversions, improving the customer experience and identifying promising growth opportunities.
Unfortunately, PayPal does not provide tools to measure any of these metrics. While PayPal does offer raw transaction data, this data cannot be analyzed or visualized very well. As a result, you're limited in how you can learn from previous customer behavior, and you are forced to guess when making changes to your website or introducing new products.
Payments data involves the nuts-and-bolts of your transactions, including:
This information is key because failed payments are very costly for ecommerce companies. In fact, 11% of customers say that they abandon purchases when their payments are declined. The issue becomes even more serious for cross-border transactions, where there is a higher risk of a transaction being flagged as fraudulent.
Visibility into processing fees is also valuable, because it allows you to understand the true costs of doing business with different segments of customers.
While PayPal does let you know when a transaction has been declined, it does not offer much visibility into the reasons why. It also does not provide much accompanying detail on the specific fees incurred for each transaction.
First impressions are everything in the world of ecommerce.
In order to optimize the customer experience, businesses need to pay close attention to every aspect of their website’s look and feel. And nowhere is this more important than in the checkout and post-purchase process. After all, these are the critical stages which determine your conversion rate and customer lifetime value.
PayPal offers very little control over these two stages. Instead, it forces you to send your customers to an external PayPal page for checkout. This can be a jarring experience for your customers and can cause you to lose their trust and hence, the sale.
As for the post-purchase stage, PayPal does not allow you to make upsell or cross-sell recommendations to your customers based on the items they’ve previously bought. This is a missed opportunity to match your customers with products that appeal to them, and will greatly decrease your customer lifetime value.
If your ecommerce store is going to scale effectively, you absolutely need a payments solution that’s reliable and contributes to a positive customer experience.
If you want your website to be optimized to make sure you earn the most revenue possible, you need to be able to have access to responsive and knowledgeable support.
PayPal does have a reactive customer service hotline. However, this goes to a public call center. Ideally, you need your own dedicated account manager who knows your business and can suggest what might work best for your checkout. It also helps having a dedicated client support team that can deliver the functionalities you need from the platform.
Another service that PayPal lacks is direct billing support for your customers. Most businesses do not have in-house support staff that specialize in payments, so this can be a helpful service. It becomes even more important if you have international customers, who may not be able to communicate with your staff in English.
In contrast, a full-service payments solution like Origins Ecommerce will offer multilingual billing support. Should any issues arise with your customer’s purchase, they will be able to pick up the phone and speak to someone in their preferred language. This can give customers great peace of mind, making them much more likely to purchase from you instead of a competitor.
As the owner of a successful ecommerce business, you work hard to provide your customers with high-quality products and services.
Doesn’t it make sense to put the same quality into the payment experience?
A well-crafted payment process can be about more than just processing credit cards. It can be a smoothly integrated part of the store experience that wows customers, increase conversions and builds long-term loyalty.
If that’s something PayPal is no longer able to provide, it might be time for a change.