PayPal Vs Standard payment processors

9 replies
Hi,

I'm at the point where I have to move away from PayPal. They're taking 20% of my daily income and keeping it for 120 days.

Does anyone know if changing my payment processor from PayPal to a standard payment processor will effect the conversion rate?

This product is outside the IM niche - I can imagine the majority of people in this niche use PayPal. For example everyone in the Warrior Special Offer thread uses PayPal - and using something else would probably have a negative. But in the 'real world' of ecommerce would changing from PayPal to a standard payment processor make a huge difference?
#payment #paypal #processors #standard
  • Profile picture of the author Shaun OReilly
    The only way to know how using a different payment processor
    will affect YOUR conversion rates is to TEST it for yourself on
    your own site.

    I would GUESS that using a payment processor other than PayPal
    - even outside IM - will cause a reduction in your conversion rate.

    Why?

    Because people have to type in more details - which they can get
    wrong and may be more reluctant to reveal.

    Thanks to eBay, a lot of people inside and outside IM use PayPal
    because of the ease of use and sense of security (by not having
    to reveal their banking details to vendors).

    But, test it for yourself to prove one way or the other.

    Personally, I'd stick with PayPal and consider the 120 day holding
    as a minor inconvenience on the route to securing higher conversion
    rates.

    Dedicated to mutual success,

    Shaun
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    • Profile picture of the author Joe Motion
      Originally Posted by Shaun OReilly View Post

      The only way to know how using a different payment processor will affect YOUR conversion rates is to TEST it for yourself on your own site.
      This reply really annoys me. I know I can test it myself - but as this is a forum I just thought I'd see if anyone has any opinions on the matter.

      The PayPal 120 day 20% isn't a "minor inconvenience", it puts a huge dent in my earnings. I've looked at everything and I've got to move.

      You're right about eBay bringing PayPal to the mainstream.

      Perhaps I could have a form first asking for basic contact details - then take them to the payment page, and then correlate the 2 lists and see who didn't go ahead with the sign up process and send them a link to PayPal.

      Sorry about the first part of this message - just a bit angry still with them. No warning or anything. Just an email - we're keeping 20% of your entire take every day.. not my profits.. my entire incoming cash everyday.
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      • Profile picture of the author Shaun OReilly
        Originally Posted by Joe Motion View Post

        This reply really annoys me. I know I can test it myself - but as this is a forum I just thought I'd see if anyone has any opinions on the matter.
        The reality is that the OPINIONS of people on this forum
        do not count anywhere near as much as the opinions of
        your own site visitors - hence the need for testing.

        I'm an old-school scientific advertiser and don't change
        my business model based just on the opinion of people
        on a forum.

        I'd do a split-test of PayPal vs. another payment processor
        and then MEASURE the effect on the conversion rates.

        If the conversion rate drops by 20% by using another processor,
        then I'd prefer 20% of my money from PayPal in 120 days than
        NOT having that 20% ever with another processor.

        Originally Posted by Joe Motion View Post

        The PayPal 120 day 20% isn't a "minor inconvenience", it puts a huge dent in my earnings. I've looked at everything and I've got to move.
        I said that I'D consider PayPal holding the 20% a minor
        inconvenience if it gave me higher conversion rates. I'm
        not saying that you should view it as a minor inconvenience
        as well.

        I'm just letting you know how I'd respond to the situation
        if I were in your shoes.

        You can accept, modify or reject it as you wish.

        Dedicated to mutual success,

        Shaun
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  • Profile picture of the author Steve Rosenbaum
    I've just signed up for PowerPay, but have no track record yet
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    Steve Rosenbaum - The Back End Specialist
    Legally Extract Facebook User Data into Your Database

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  • Profile picture of the author XYZcontent
    Try ringing paypal and tell them that you will have to change payment processors if they don't change the 20% thing.

    Nevertheless I wish you good luck
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  • Profile picture of the author Joe Motion
    I'll start testing over the next few days. That's pretty obvious - my merchant account is ready to go.

    What I was looking for was people that have had many sales online and tried different payment processors..

    I'm all for A/B testing and multivariate testing - I will test this completely. I've been spending thousands of pounds on Google AdWords every month and test everything!

    I just wondered if anyone had any experience.. I did check out the usual websites like Anne Holland's Which Test Won – A/B Test & Multivariate Testing Education for Marketing Professionals but they didn't have anything relevant.

    If anyone has tried this please post!
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    • Profile picture of the author Aussie_Al
      I have found some of my e-commerce sites lose sales by just offering paypal - some people are lost on the concept of paying by creditt card using paypal and abandon the shopping cart (Even though it clearly says - don't have a paypal account - click here to use your credit card)

      I am also of the understanding that most payment process have a provision to "hold reserves" (eg YOUR MONEY) to cover themselves against potential returns.

      You might wish to read the fine print with Powerpay or who ever you end up using

      I find the whole "holding reserves" pretty standard
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  • Profile picture of the author BIG Mike
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    • Profile picture of the author Joe Motion
      Originally Posted by BIG Mike View Post

      I ran a test a few years back using PayPal, 2CO and StormPay - PayPal beat them all hands down. I haven't tested that since but it's one of those things where it's fairly obvious that they're widely accepted and trusted by consumers (especially outside of IM).

      As a consumer, my preference is to buy from sites using PayPal. If that's not an option, I generally won't buy unless the company is really well-known.

      I think you're looking at this from the wrong perspective anyways - instead of changing payment processors, why not try to resolve whatever is causing them to hold a reserve on you? Others have done so successfully.
      Thanks Mike, insightful reply.

      I have actually rang them - they've assigned me someone to chat to about my account; and have been really helpful. They asked a ton of questions about my websites, how I advertise, what I sell, what the end-user gets, what my margins are, and even gave me advice on how I can reduce refunds. After I'd given them all that they said they'd get back to me in a few days with regards to if they can change anything.

      My preference is, unfortunately, PayPal as well. I haven't used my bank card online for years - but I thought that might be something to do with me being involved in 'online marketing'.. but then there's the eBay / PayPal connection that brings PayPal into the mainstream.

      I'll wait and see what others say (if anything) and start testing my standard processor tomorrow! I'm quite excited to see the results if I'm honest.

      But yeah, as a quick warning.. (obvious to some).. if your business is running on one payment processor.. prepare for the worst and sign up with a few more.. as it's a lengthy process... sending off bank statements etc..
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  • Profile picture of the author Joe Motion
    You're right. Many of them do.

    For example - I'm testing NoChex tomorrow. They're a great payment processor I used a few years back. They have a 200GBP holding reserve - and then after that go over your sales to check everything is fine.. then you're good to go.
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