If you Only Accept PayPal, You're losing Money

30 replies
I recently ran a one week test.

I created a script that determined the ratio of clicks to the buy page to the number of people who actually visited my sales page. I sent half of the people to my PayPal page and the other half to another vending processor that accepted PayPal, credit cards, phone orders, etc...

Of those who clicked the paypal link, only 8% converted. For the other payment processor, 13.5% converted.

This obviously has something to do with your niche, since people in some niches such are more likely to use and trust PayPal more (the IM niche for example). But in my test the answer was pretty conclusive.

Now I'm going to test the benefits of customizing the buy page of the vending processor.
#accept #losing #money #paypal
  • Profile picture of the author Isaiah Jackson
    That is very interesting to know, thanks for testing that because I was actually wondering that myself
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  • Profile picture of the author Alex Barboza
    I would say that Paypal is more an internet marketer's preference but if your target market are not internet marketing savvy and are people with money to spend then they would prefer using credit cards.
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  • Profile picture of the author sprice
    If you're marketing to non-IM clients then you must have some sort of credit card processor. Paypal just won't cut it for some of those people. But I have noticed that paypal is accepting "guest payments" with credit cards now.
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  • Profile picture of the author Mohammed Hammad2
    Before determining the accuracy of that test.

    What was the number of people you ran this split-testing on them?

    Personally speaking I wouldn't trust less than 2,000 people to each page
    because it depends on so many factor to judge.

    By the way, I would love people to prefer anything but PayPal
    so I am in no way trying to defend them.
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  • Profile picture of the author jeffreyhuan
    The result really depends on the niche. For IM niches, PayPal is one of the most popular ways to pay without revealing credit card information. For non-IM niches, people may prefer to using their credit cards.
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  • Profile picture of the author MattVit
    May I ask who your other vendor was? Interesting stuff, mate!
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  • Profile picture of the author bl
    I already knew this due to so many people requesting other ways to pay other than paypal and also people complaining about paypal and their service. Also think about the tons of people who said they have gotten their accounts closed by them and can't accept payments. That leaves a lot of money on the table that a business or seller can't get to if they only use paypal.

    I am one of many who have had a lot of problems with paypal and I prefer to pay through other means and when there are none, I do not buy sometimes. It really depends on whether I need it or want it badly enough. Paypal continues to leave a bad taste in my mouth. I hope others open up to accepting payments through amazon and other paypal alternates. Especally like you pointed out, your not getting the maximum sales with them as the only pay option.
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  • Profile picture of the author wilder1047
    I recently set up a business account through Pay Pal.

    You have the option to set-up EVERYTHING, including phone billing, although, I didn't actually look into it, since I didn't opt to use it, so it may be limited in comparison to other services.

    What were the other providers you used?
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  • Profile picture of the author wfhblueprints
    In one of my ecommerce sites we boosted our conversion from 0.2% to about 3% by simply switching from Paypal to 2Checkout (which still offers paypal).

    It seems that the Paypal horror stories or peoples reluctance to store their details with them extend wider than what some people may think.

    My set up is now: Clickbank for any infoproduct related stuff, and 2checkout for any ecommerce site.

    Regards

    Chris
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  • Profile picture of the author JasonParker
    Interesting test!

    Funny, I got the opposite when I tested PayPay vs regular merchant account. PayPal converted double the merchant account.
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  • Profile picture of the author fmnely1
    personally i have turn down many paypal but i prefer credit card and more over to found my paypal always cost much more ..so i stick to credit card
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  • Profile picture of the author entry
    Originally Posted by joaquin112 View Post

    I recently ran a one week test.

    I created a script that determined the ratio of clicks to the buy page to the number of people who actually visited my sales page. I sent half of the people to my PayPal page and the other half to another vending processor that accepted PayPal, credit cards, phone orders, etc...
    .

    Now I'm going to test the benefits of customizing the buy page of the vending processor .
    What company /service do you use/advise as a vending processor ?

    - to your alternative to paypal ?
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  • Profile picture of the author wfhblueprints
    Originally Posted by bowerboy View Post

    Pricey though at 5.5%
    Agreed...but it offsets having to pay a monthly fee.

    At a $49 one time charge and the 5.5% (+0.75c) per transaction it is the less risky option if you consider some standard payment processors charge at least $19.99 a month.

    I agree that once you hit a regular sales volume it may be more economic to switch over to another Payment processor...but it is a very flexible option.

    Regards

    Chris
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  • Profile picture of the author dvduval
    I think that's it depends on the volume of sales. They're definitely is a time when a credit card processor Brings about more profits then pay pal. However, hey tell is a wonderful platform and I have been very happy with their Service.
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  • Profile picture of the author Joseph Robinson
    Banned
    Paypal has done very well for me so far (at least I havent experienced any of the horror stories told on here), and I think that I would continue to use it as long as it remains as easy to use and well known among clients. Thats not to say that I wouldn't use merchant accounts as an alternative and backup plan because you just never know what could happen.
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  • Profile picture of the author absolutelee
    That's certainly interesting. I've noticed that although PP accepts credit cards from people without PP accounts, they don't make it very clear what to do. So, if you're in a niche that's not familiar with buying online as much, that might be the issue.
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  • Profile picture of the author seobro
    Please understand why we started using pay pal even. Back in the 90's you would order a product from a little known company. Then all sorts of bogus charges would begin to appear. It was a real nuisance.
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  • Profile picture of the author Rukshan
    Good idea to test. I work with Fastspring and Moneybookers to collect payments other than Paypal. Because some of buyers can't use paypal in some countries.
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  • Profile picture of the author samuelsss
    I would make it a priority to offer as many options to pay on your website. This can only boost your sales.
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  • Profile picture of the author timpears
    If you notice, Clickbank has an option to choose PayPal or credit card after you hit the buy now button. They say that giving your customers choices tends to confuse them and a large majority don't make any decision. But in this case, I think I would go with giving them the choice if you can.
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  • Profile picture of the author flocon
    Thanks for sharing your results. The difference in conversion is not negligeable. I was actually surprised by the results you gave.

    While Paypal accepts credit cards, some ideas I have are that either all your leads did not know that Paypal accept credit cards or the way they wanted to pay was not available or finally, that they did not trust Paypal.

    In any case, thanks for making this test and sharing your conclusion.
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  • Profile picture of the author WildaGorskic
    Yes , I accept it with the op , if you aceept only paypal payments , you would loose clients from India , pakistan , Bangladesh where people dont use paypal atleast for sending money , but money is money for us what ever ...
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  • Profile picture of the author iuditg
    I think as a vendor people should provide variety of payment options like Google Checkout, paypal, moneybookers, alterpay, Authrorize.net. It doesn't harm to provide them with so many options. Paypal has worked the best for me in my niche as it is the most popular payment gateway available on the internet right now.
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  • Profile picture of the author ianternet
    interesting... I did a test with clickbank vs paypal and noticed a difference as well.
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  • Profile picture of the author jesisco
    That's a cool test. As you said IMers like paypal because they trust in. According to your results will we use only paypal if we are in Im niche? Or must we do our own test?
    Thanks
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    • Profile picture of the author wfhblueprints
      Originally Posted by jesisco View Post

      That's a cool test. As you said IMers like paypal because they trust in. According to your results will we use only paypal if we are in Im niche? Or must we do our own test?
      Thanks
      I think you will find that more and more people in IM are trusting Paypal less and less.

      People on this forum tend to use Paypal for their WSO's because of the comprehensive and robust system that WSO pro provides......but that still doesnt stop Paypal from blocking your funds.....
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  • Profile picture of the author NolanHill
    perhaps, but I moved away from paypal for a while and it ended up being a mistake.
    Seems like the easier and safer route
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  • I guess the paypal wasn't payflow pro? You could integrate it and not take uses off the site nor let them know paypal did the processing.
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  • Profile picture of the author Salma08
    According to me, PayPal is very difficult and complicated and difficult for freshers to understand. One of my friend had a very bad experience with PayPal.
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    Salma Ali

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