I’ve written about Paypal plenty of times in previous articles on this blog. I did a review of Paypal, I talked about Paypal vs Paymate, the Australian competitor to Paypal and I reviewed the book, Paypal Wars, which chronicles the rise of the company and the battles it went through against eBay before it was eventually purchased by the online auctions giant.
I like Paypal a lot – I love getting those “money received” emails – who doesn’t. I’m well aware of the controversy the company faced in the past but I still recommend it as a solid online payments solution for any Internet business because I believe the worst is behind them. My Paypal review says just that (with a few more words to back up my argument of course).
Today though, I present an even stronger case for using Paypal – I believe no online merchant can afford not to offer Paypal. If you don’t provide a Paypal payments option you are leaving money on the table. It’s as simple as that.
- Paypal is the standard. Whether we like it or not, Paypal is the de-facto, it’s what everyone uses, everyone has an account and everyone knows how the system works. Okay, not “everyone” who is online uses Paypal, but chances are if a person has made an online purchase before they know what Paypal is and how it works. The awareness factor is only going to increase as more people become comfortable with online shopping.
- People treat their Paypal accounts like play money. Initially I was frustrated that Paypal kept my money in a “paypal account” and I had to withdraw the money before I could see it in my bank account. This was one of my original complaints in the Paypal Vs Paymate debate. Paymate deposits my money directly into my bank account (minus fees) while Paypal pools my money in a virtual account where it gains no interest and runs the risk of being frozen, as so many Paypal horror story victims recount. I thought this was a bad thing.
Now I realize this is actually a genius move by Paypal. People leave money in their Paypal account so they can use it to buy things online. That’s why they treat it as “play money”. It’s great psychology – since the money doesn’t show up in a bank account or on a credit card bill once you spend it online it feels like you are not spending real money. You might think I am foolish saying this and you may value your Paypal just as high as any money, but the fact is a lot of online consumers don’t look at their Paypal balance the same way as their bank balance. Your business has to accept Paypal “play money” because it psychologically reduces buying barriers.
- EBay creates Paypal dependent consumers. The most common form of online commerce is eBay. Many thousands of people are first introduced to buying and selling on the Web thanks to the miracle that is EBay, either by selling or buying something at auction or under a “buy it now” purchase. As we all know Paypal is well integrated with eBay and many first time eBay users will very quickly become first time Paypal users as well. It’s very likely they will keep a balance in Paypal purely as “auction money” that they spend at eBay. This process is where they first experience the “play money” psychology and at some point in the future when an eBay user decides to buy outside of eBay, they will feel very comfortable using Paypal, yet they may consider using their credit card not safe. In that case if you don’t have Paypal as an option, you potentially lose the sale.
I Just Bought New Skates
I left Australia for Canada without my inline skates. I love to skate. I planned on buying new skates when I arrived in Canada, and since it is the home of hockey, I believed their would be plenty of shops were I could get a nice pair of new recreational inline skates. Unfortunately after some research it became apparent that there are no inline skate specialty stores in Toronto and because winter is closer than summer most stores had put away their stock of inline skates and ice skates were getting all the attention.
The solution – look online. I’m no stranger to online buying and I quickly found plenty of specialty skate shops in the USA. In particular I was recommend one online shop by a sales attendant in Toronto who said she “always buys her skates from there”. This particular store was first in the search engines for inline skates and had a huge selection – exactly what I was looking for in the offline world in Canada, but unfortunately this store’s physical presence is in California.
I arrived at the Inline Warehouse skate shop and the first thing that greeted me was a huge banner at the top that said “Now Accepts Paypal”. I grinned and instantly felt more comfortable buying from them – I could use my “play money”. This factor was a major consideration for me because, surprising as it sounds, many traditional online stores only offer credit card via a merchant facility or offline payments methods like checks/cheques. Finding a merchant that uses Paypal in my mind is a tick of approval and definitely reduces my resistance to buy from them.
Paypal Must Be An Option At Your Website
The moral of this story is by having Paypal as a payment option and proudly displaying this factor, you will increase your sales. At the very least even if you don’t want to slap a big banner on your website front page saying you take Paypal, make it an option when it comes time to pay. People need to be able to spend their “play money” at your business and if you don’t have this option you are losing potential customers.
You can find more on taking payments in my podcasts – Taking Payments Online – Part 1 and Part 2. These were created last year and are a bit rough around the edges but they contain a rundown of how I eventually chose what payment providers I went with for my online business.