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Will 53% of customers switch to PayPal?

August 12, 2007

It’s time to find out. I just rolled out the updated Visitor Boost and Targeted Visitors sites that send all new customers directly to PayPal for payment. This is the riskiest thing I’ve ever done with these sites, but I need to start taking some risks — I’ve got 10 months until I graduate college to ensure a stable business to live on.

In 2007, 53% of my customers chose to pay with a credit card on one of those sites when given the choice between that and PayPal. If the dispute/chargeback rate through PayPal remains around 1% as it’s been, I can lose around 10% of my daily order volume and still end up even thanks to reduced chargeback losses. In reality, I’m willing to give up more than that if it means a less risky business with less administrative work screening for and handling fraud.

I’ll be watching the sites’ conversion rates closely over the next week or two to see what happens.

Categorized under: Business, Security

7 comments

  1. August 12th, 2007

    Jason wrote —

    Good luck. I hope it all works out well! Are you going to keep your older, more reliable customers on credit card still?

  2. August 12th, 2007

    Dan wrote —

    Yes. The first checkout step is either creating an account or logging in to an existing one. Previously, after doing either, the customer would be shown an order summary and payment options page where they could choose between PayPal and a form to enter credit card info. Now, if the user logs in, they’re sent to that page with both options, but if they fill out the registration form as a new customer, they’re sent directly to PayPal. I think it works really well since PayPal’s new payment page designs match the look and feel of my checkout pages very closely, so it’s a seamless transition. So far this morning, it’s looking good.

  3. August 13th, 2007

    doolally wrote —

    It will be interesting to see how this works out for you, please keep us updated.

  4. August 20th, 2007

    Fahd wrote —

    Dan,

    I would suggest you tread carefully. I’m sure you’ve come across sites like nopaypal.com and paypalwarning.com that you probably dismissed as disgruntled scamming users (just like I did). But a recent experience with paypal has me completely convinced otherwise.

    Paypal is not entirely safe or reliable. I still use them because I have to. But if I had an alternative, I would say good bye to paypal forever. If you want specific information on my experience, feel free to PM me on SP.

    Good luck!

  5. August 21st, 2007

    jimbo_dk wrote —

    I’d like to see how things progress after your switch, because I’ve been wanting to do the same on some sites.

    The main gripes I have about Paypal is that it customizes the payment page based on the user. i.e. If the user had logged into PayPal before on that computer(read cookies), it shows only a PayPal login. The CC details sections below the fold or not at all sometimes. I’ve found this confuses some customers who have Paypal accounts but want to pay using CC.

  6. August 28th, 2007

    Contrid wrote —

    Unfortunately I don’t have paypal, since they don’t fully support users in my country. I can send money, but not receive money.

    Due to that, my only option is credit card. After all, most users whom have paypal accounts have a credit card which they use to upload funds to paypal.

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