PayPal Pro costing people sales?

8 replies
My first experience with a PayPal pro transaction was on 1shoppingcart... it was one of the worst nightmares I had ever seen when it comes to ecommerce automation.

The transaction could not complete because of faulty integration between 1sc, paypal pro, and the publishers site.

Though I am sure the publisher and 1sc were able to work out the integration issues another big problem still remains for PayPal pro users...

The long, tedious, and confusing checkout process for customers.

In our own research and development we found nothing that PayPal pro offered us that provided any benefit above what we could accomplish with our current merchant account provider and the standard paypal with own front and back end automation system.

My goal in development has always been to stick with the concept that more steps = more chances for shopping cart abandonment and failed orders and less steps = higher conversion rates. We developed a way to capture additional customer data on the front end without the need for paypal pro and which makes use of the standard paypal checkout process.

This was all brought back to my thoughts today when I called a company who had emailed me because my order placed on their site using PayPal Pro had failed to go through because of a failed communication between their system and paypal pro toward the end of the 5 step checkout and confirmation process.

I talked to one of the administrators at the company after speaking with the sales rep to give them a little feedback on my experience.

The item I was trying to purchase was relatively inexpensive so on the surface one lost sale might not seem like a big deal... but as I explained to the manager the purchase I had tried to make was part of product research and I was actually buying the product so that I could decide whether I was going to recommend them to tens of thousands of subscribers as a source for a new DIY project now I am likely to recommend local sources for the part even though they are more costly.

While I am sure there must be some perceived benefit of PayPal pro for others I have yet to see it.
#costing #paypal #people #pro #sales
  • Profile picture of the author Josh Anderson
    Each time that I have experienced paypal pro the process has involved around 5 steps.

    This seems to be pretty standard.

    In this particular system the steps were add product to cart, go to shop cart, choose paypal, then go to paypal, go back to merchant site and confirm.

    I use paypal every day and this was still a confusing process for me.

    In speaking with the company they told me that they had dropped paypal in the past because it was costing them sales and increased abandonment... of course this could always be partly the merchant's fault since they are in charge of the shop cart system and leading the client through the process but he also said that some complaints focused on paypal itself and unlcear information on the paypal steps in the paypal site.

    However he also said that when they dropped PayPal as an option though their clients complained.

    The reason you use them is because they are less of a PITA than other merchants. Sure, they charge a bit more, but it's worth it to not have to deal with a merchant company. That is the epitome of a black hole. I can put through 50k on a paypal account one month, 20k the next, and then 125k the next and never have any issues. Plus, paypal doesn't nickel and dime you like merchant accounts with statement fees and all the other misc fees.
    I guess you did business with the wrong merchant account provders then...

    My merchant account provider costs less, charges less in fees, charges a lower discount rate, and in my experience has been better to deal with than paypal. But paypal is a great benefit as people do love to use it including myself... I am just not convinced that PayPal pro offers any benefit over standard.
    Signature
    {{ DiscussionBoard.errors[420174].message }}
    • Profile picture of the author davebo
      Banned
      [DELETED]
      {{ DiscussionBoard.errors[420264].message }}
      • Profile picture of the author bsmith
        Originally Posted by davebo View Post

        I've pretty convinced that the all-in costs of a merchant account are surprisingly similiar to Paypal Pro if you actually looked at it closely.
        I agree. In fact, I've had both merchant accounts and Websites Payment Pro and PayPal was the least expensive option of them all (some processors become less expensive than PayPal if you sell enough monthly I hear...but not that many do $100k/mo, LOL!).

        PayPal was also more stable/reliable than any other option I've used and had better support too (PayPal was even better than authorize.net in both these areas.)

        But what I love most is how PP fights chargebacks for me. I've won well over 90% of the chargebacks attempted. In fact, PP no longer even deducts the money from my account when a customer attempts a credit card chargeback.

        Even better, I've never lost a penny when a PayPal customer (that paid via their PayPal account) asked for an illegitimate refund.

        In my experience, if you follow the rules, PayPal will bend over backwards for you. They sure have for me, and continue to do so, and that has made me a fan (in case you wondered why I post in their behalf, LOL!).
        {{ DiscussionBoard.errors[420321].message }}
    • Profile picture of the author bsmith
      Originally Posted by Josh Anderson View Post


      n this particular system the steps were add product to cart, go to shop cart, choose paypal, then go to paypal, go back to merchant site and confirm.
      davebo is a right because what you just described is NOT part of Websites Payment Pro (WPP for short).

      WPP doesn't include a shopping cart at all. You have to provide that yourself because PayPal operates like any other credit card gateway at the WPP level (except for the fact that it also allows for the customer to pay with their PayPal using an abbreviated login/pay system).

      PayPal does have a shopping cart for their regular business accounts. Maybe that's what you're seeing?
      {{ DiscussionBoard.errors[420281].message }}
  • Profile picture of the author Josh Anderson
    because PayPal operates like any other credit card gateway at the WPP level (except for the fact that it also allows for the customer to pay with their PayPal using an abbreviated login/pay system).
    Ah... that explains it.

    Do they let the publisher opt out of offering the abbreviated login pay system?

    This is the process that I have seen fail so miserably in these two examples and the process that ads extra unnecessary steps creating confusing checkout process.

    I can see no benefit to using paypal pro if that is the process offered to a customer. It only makes the process more complicated and confusing than a standard paypal checkout.

    The order starts on company site, goes to paypal site, but then must be confirmed and completed on the company site in the final step. Bad news and definately a recipe for confusion.

    I've pretty convinced that the all-in costs of a merchant account are surprisingly similiar to Paypal Pro if you actually looked at it closely.
    With 5 years of research and development in ecommerce we have looked at things pretty closely ;-)
    Paypal has an easier interface, better statements, and more transparancy with fees.
    This may have been your own experience comparing paypal and the merchant providers you have worked with but this has not been my own experience.

    I have been using paypal for 7 years and developing external solutions for paypal ecommerce automation for 5 so I am fairly aquainted with them ;-)

    Paypal Pro allows you take accept visa, mc, discover, amex, diners club right off the bat. If you use a typical merchant account, you are paying extra for amex and discover, plus higher discount rates.
    I actually pay less on my merchant transactions than paypal. But merchant providers vary much like banks so your experience could be different. It's not really possible to generalize this because of the varying fees and policies of merchant providers. I got Amex and Discover at the same time I got my merchant account all I had to do was ask at the same time I applied for the merchant account and Discover does not cost me extra and Amex costs $5.

    So lets say that your merchant account costs you $35 in fees each month. Lets say the difference between the discount rate that paypal charges and the discount rate that your merchant account charges is that paypal charges .6% more (this is my case) which is a 20% difference. Both companies charge the same per transaction fee.

    If you processed a group of transactions through paypal and your discount fees came to $2000 in paypal they would be only $1598.66 from the merchant.

    Then you would have traded $35 for $400+

    How many people would trade $35 for $400+

    Now I am not making the case NOT to use paypal. I actually offer it because in some cases it does increase conversion rates to do so and the higher fee is acceptable for me to pay...

    What I am suggesting is that PayPal pro offers no benefit that I have found to PayPal standard. In our own development and automation we have found nothing that we cannot accomplish with Paypal Standard in our applications.

    Also note that businesses experience may vary depending on who their providers are, what rates they qualify for at paypal and from their merchant provider etc.

    Not to mention statement fees
    I am not charged any by my provider. Just like a bank... you need to choose wisely :-)
    fees for failed transactions
    A valid concern. We developed a system that validates more than most so that transactions sent to the gateway have the highest level of success that we can prepare.

    However, in my own experience with failed paypal pro transactions on merchant sites ended with the purchase not being made not due to invalid user input but long and confusing order and confirmation processes. The cost may be more then... but this again would require tests and data to validate for the publisher.

    By default my choice was to avoid paypal pro and develop a solution using paypal standard so that we did not even have to introduce this problem in the first place.

    extra discover statement fees,
    I am not charged any.

    and if you have a problem forget it.
    I have had no problem getting assistance, support, even negotiating with risk management, and speaking with representatives who know me personally.
    Oh yeah, not to mention wanting longer contracts....even if your broker says they'll "waive the early cancellation fee". Good luck with those too.
    Broker? Early cancellation fees?

    Sounds like you just chose the wrong merchant provider. Those concerns do not exist in my merchant relationships.
    Signature
    {{ DiscussionBoard.errors[420300].message }}
    • Profile picture of the author bsmith
      Originally Posted by Josh Anderson View Post

      Ah... that explains it.

      Do they let the publisher opt out of offering the abbreviated login pay system?

      This is the process that I have seen fail so miserably in these two examples and the process that ads extra unnecessary steps creating confusing checkout process.
      No, they don't let you opt out of offering PayPal as a payment option -- but that is NOT what you are seeing.

      "Express Checkout", which is the name of the PayPal payment option used in WPP accounts, is only called at the final step (e.g. all items, taxes, S&H costs, etc. have been added up and a "final amount" or "total" is known -- you can't go from Express Checkout back to a cart to add/delete items and then back to Express Checkout, etc. without starting new, multiple transactions).

      I think you're just seeing a badly configured shopping cart that is NOT part of PayPal (Websites Payment Pro does NOT have a shopping cart included -- you have to provide one yourself).

      But it's possible you're seeing a regular business account using PP's shopping cart which is available for that level of user. I've never seen anybody use it and that's a sure indication that it stinks....but WPP does anything but stink
      {{ DiscussionBoard.errors[420367].message }}
  • Profile picture of the author GarrieWilson
    Josh,

    You must have just seen poorly implemented sites.

    I have seen it on one site and the flow was:

    1. Add to cart
    2. either checkout or continue shopping
    3. checkout shows one page that asks for billing/shipping and at the bottome a button that says pay w/ PayPal.

    If you pay with CC, it only leaves that page to process, if you click PayPal, it does a "normal" PP checkout.

    On a site w/ ONE poduct, the "buy button" takes you to step 3 above.

    Pretty simply if it's used correctly.

    Garrie
    Signature
    Screw You, NameCheap!
    $1 Off NameSilo Domain Coupons:

    SAVEABUCKDOMAINS & DOLLARDOMAINSAVINGS
    {{ DiscussionBoard.errors[420350].message }}
  • Profile picture of the author Josh Anderson
    "Express Checkout", which is the name of the PayPal payment option used in WPP accounts, is only called at the final step
    In both these cases it was not the final step... it was the step before the final step or steps which happened back at the merchant sites to "confirm" order for the physical product and in the case of the digital to confirm order and then deliver access.

    These steps in my mind should be uncessary since the sending of payment should be placed and confirmed in the paypal step and the only thing that should happen after is receipt being sent and delivery.

    Must have been badly implemented PayPal pro I experienced. The express checkout should have been just like traditional paypal checkout but for some reason the confirmation button for submitting the payment and order had to be finalized back on the client site after going into paypal and back out again.

    Given that so many people are not used to extra confirmation steps after leaving paypal for the payment to actually be processed it seems standard paypal would have worked better since at least the payment would have been collected.

    But it's possible you're seeing a regular business account using PP's shopping cart which is available for that level of user.
    I don't think so. In both cases I spoke directly with company admin and they said it was PayPal pro and both expressed their frustration and acknowledged lost orders with at least their application of it because of the problems in the multi-step process and customer confusion.

    It seems to me that the most effective use of PayPal pro would be to treat it 100% like a merchant account and not send them to paypal at all since this express option seemed to open up the opportunities for these problems. But then if its just bad shoppingcart implementation...

    I have yet to experience anyone using paypal pro who has good shoppingcart implementation and would love to see better examples.

    I still have yet to see anything in my case I would consider a viable benefit of PayPal pro vs using my own merchant account and offering paypal standard.
    Signature
    {{ DiscussionBoard.errors[420423].message }}
  • Profile picture of the author davebo
    Banned
    [DELETED]
    {{ DiscussionBoard.errors[420533].message }}
    • Profile picture of the author Josh Anderson
      Don't you understand that if it's implemented properly than there is no way to know that they are using paypal pro????
      Yes I understand that now. My experience is with people using pro but in one of the steps pushing the express checkout feature.

      Obviously if you were paying less, having a better experience, and not loosing sales because of integration issues with PayPal Pro than your merchant solution that would be the best choice.

      For me if I were to use it I would Pay more in fees than I do currently with my merchant solution and it would not provide me any additional benefit over my current approach of processing CC and offering Paypal standard checkout with less steps than the examples I experienced with the pro integrations.

      My confusion was over:

      because PayPal operates like any other credit card gateway at the WPP level (except for the fact that it also allows for the customer to pay with their PayPal using an abbreviated login/pay system).
      Which seems pointless and in the cases I experienced ended up unselling the sale because of the way it was integrated in the sales process and the confusion it caused.
      Signature
      {{ DiscussionBoard.errors[420601].message }}

Trending Topics