42 replies to this topic

[alan]

I've been using PayPal since I started my site several months ago. I was told by the owner of biggest sites on the web (in my industry) that a lot of people don't like PayPal, and they won't buy from you if that is the only option you give them.

PayPal does NOT force you to have a PayPal account to use their service. And to make that perfectly clear to my customers, from the beginning I created a pop-up web page that I ask all of my site's customer's to read before making a purchase. I have a button with the caption [Must Read Information] immediately above the [Add to cart] button.

If anyone wants to see it, go to my site, click on any product link, then click on the purchase "product" link and you'll see the button. Click it and see if it makes it perfectly clear that you do NOT have to sign up for a PayPal account. If you take the time to do this, please let me know if it's clear or not.

To the point. I just got an email from a prospective customer telling me that PayPal is forcing her to sign up, and she doesn't want to. When I checked it out, PayPal had changed the verbiage on the link that lets anyone without an account charge items to their credit card. The link used to say, "Don't have a PayPal account? Click here. Then changed the verbiage to "Don't have a PayPal account? Sign Up Here"

I called tech support and was told that they know that it's an issue, and it's been broken for the past five days, and they don't know when it will be fixed. I asked for a supervisor, and he also told me that they can't give any indication of when it will be fixed.

1. Does anyone have any stats or other experience to indicate that a lot of people don't want to get involved with PayPal? I know a lot of people use it. But I must admit that I don't like using my PayPal account to buy things because it makes bookkeeping a nightmare. And if I return an item, the refund money sits at PayPal, it doesn't go back to my credit card automatically. As I said, I hate the bookkeeping involved with this kind of stuff.

2. Is it time for me to bite the bullet and get a merchant account and a real shopping cart? It's hard for me to justify it financially.

Edited by alan, 19 October 2006 - 12:01 AM.

[redsonia!]

Alan:

I started my websites with a paypal only cart and did not make any sales. I could tell that people were coming to the site but no one was buying. A marketing professional told me that I needed to get away from the paypal as my only means of payment. (This was several years ago when the client had to set up an account with paypal). So I bit the bullet and got a regular merchant account so I could accept CCs and Whoa! What a difference. So IMHO I would say -Definitely get a merchant account. I think it gives you more credibility and, in my experience, customers definitely prefer it. You can still offer paypal as one of the payment options. ( I decided against using it, because I figured that if they could use paypal they already had a cc, so just use the cc directly. Saves on those higher paypal fees, as well).

Again, this is just my personal experience.

[lsjep]

Hi Alan,

I've been using Pay Pal more than 4 years now, and have also tried and used merchant accounts.

Split testing showed that neither really had any advantages, and since my merchant account cost more than my Pay Pal business account(monthly averages more than the minimum 3K, which gives an excellent cost ratio compared to most merchant accts) account I cancelled the merchant accts.

I also sell on eBay. eBay has educated countless millions on Pay Pal and it is well recognized, and trusted, world wide, which is why I now use it exclusively on all my web sites, and with great results.

Never had a problem, complaint and darn few refunds.

Just my 2 cents.

[Randy]

Just to mention another option...

There are lots of 3rd party merchant serves out there that don't cost as much on the front end. Don't require you to get a merchant account or even an SSL certificate for that matter. They do cost a bit more per transaction than a merchant account does. And most will typically do bi-monthly payouts, so you end up waiting for your money a bit longer.

[alan]

Thanks everyone for responding with an opinion. I hope that more people will respond to this question as I'd like to get a very clear consensus.

As far as going with another 3rd party vs. my own merchant account, I'm afraid that I'll have the same problems that I have with PayPal, only it will be worse, because at least moste people have heard about PayPal.

I like a lot of the PayPal features, like shipping labels tied into the post office, but I'm afraid that I'm losing a lot of sales. My conversion ratio is low, I think. Currently about .005. So I'd really like to know if PayPal has something to do with that since my prices are more than competitive. And I have a totally unique selling proposition with a Patented & proven technology.

I'm going to try do some research on this questions. I'm not too sure where or how though.

So please, everyone, let me know if you have an opinion based on experience.

[OldWelshGuy]

Alan, I think that maybe if you are making a big deal of paypal, then THAT might be putting people off. We have made great use of payp[al, in fact we have a message that says

'for your protection and peace of mind, we use payapl as our payment processor. Paypal are owned by Ebay, and are authorised by the government body the Financial Services Industry , and all transactions are protected under their terms.'

I have found this to be ideal as it makes the use of paypal a closing benefit rather than an objectionable element of the sale.

[MaKa]

'for your protection and peace of mind, we use payapl as our payment processor. Paypal are owned by Ebay, and are authorised by the government body the Financial Services Industry , and all transactions are protected under their terms.'

That's a good line. Do you mind if I use it on one of my sites?

[rolf]

Hi Alan

We have Paypal as our only online option and I've asked the same question myself from time to time. I'm sure we lose the odd sale through Paypal resistance, but at this stage I'm not convinced the occasional losses are enough to justify the cost. At some point we'll certainly do some testing against a merchant account, but it's not a high priority right now.

JMHO to add to the pot.

Regarding your ordering section - I think it has a little too much going on for the 'must read information' to stand out.

The 'add to cart' buttons are nice and clear, which is great, but around these options there are 1 button, 2 text links and 3 other bits of text highlighted in blue - which I assumed were also links until I investigated. It made me a little confused and I think it could be overwhelming to someone who is less comfortable with web technology.

Personally I would make the highlighted text black and bold, and either somehow section off the other text links so it's clear they are a seperate offer, or lose them entirely. I know cross promotion can be a great opportunity, but if the user feels confused it may end up costing you the sale and I think there is a danger of this happening as it is.

I would also use a text link for the 'must read information'. My typical web-skimming approach missed the label and I thought it was a form submission button. It was only when, on your suggestion, I started specifically looking for something labelled 'must read information' that I found it.

One last suggestion - maybe there is something more compelling than 'must read information'? I'm told on a daily basis that 'you must open this email' or 'you can't live without our offer' and I have a tendency to think something like this is trying to sell at me, not to help me out. Something in the spirit of OWG's suggestion would work much better for me.

I'm being over-critical here and I think it's worth making it clear that, overall, I think your site has a good feel to it. It conveys a trustworthy image and makes me feel you know your subject, so I'm sure you have something good to build on. Hope all this is helpful.

[linux_lover]

I believe paypal is difficult for your average joe to use. If you have a paypal account and DONT want to use it but pay via credit card - you cant. Plus all the steps that it takes you through is more complicated than say Nochex.

Personally I offer both - but I call Nochex - credit card payment and I call Paypal - Paypal payment then people have both options. Both are free so why not have both?

[OldWelshGuy]

That's a good line. Do you mind if I use it on one of my sites?

Not all . Dim problem Bach

[alan]

Hi Guys,

I like your idea, Old Welsh Guy, and I'm going to incorporate a version of it. Thanks!

rolf, thanks for taking the time to look at the site and write up all of the feedback. I'm going to take a long hard look at that area of the page. I will change the text color, and make the "Must Read" caption more compelling. Do you have any ideas short of, "Read this or you will die"?

linnux_lover, PayPal has changed, a card holder can now charge to his/her card without using their account. At least I have done it dozens of times when testing sales on my own site.

I tried to research my real issue, "Does PayPal scare off customers" last night. Except in one instance on another forum, the only info I could find was either written up by people selling merchant accounts, or by PayPal. So I don't count that as valid research information.

I did find that other people are posing the same question, though.

This morning I find that PayPal has partially fixed up the problem with the link that informs people without a PayPal account to "Sign Up Here." They've placed the question: Don't have a PayPal Account? above a graphic of the credit cards. Underneath it says: "Use your credit card." This is a big improvement. However, it's not system wide. I get it from one of my computers on my network, but still get the old version from another computer.

[Betty]

I think it might depend on the product I'm looking for. I pay a contractor via pay pal and have no issues with that. He's a one man graphics guy and has no need for a merchant account.

If I want to buy a product online though - and the only option is paypal - I get the feeling that this business isn't profitable enough, or well established, or however you want to put it, enough to have a merchant account.

I probably would look for a competitor who did have more payment options.

Just the fact that if there is a problem and I have a return, it's credited to paypal instead of my card is a big enough issue and one I've already dealt with.

I'd look for alternatives to paypal.

[MaKa]

OFFTOPIC:

Dim problem Bach Diolch, you've got me there though. Did you say "No problem Little"? It's no problem? or something of the like? I'm Dutch, all the Welsh I know is from sign posts. (Dim ..., Araf etc)

[arlen]

I think it might depend on the product I'm looking for.  I pay a contractor via pay pal and have no issues with that.  He's a one man graphics guy and has no need for a merchant account.

If I want to buy a product online though - and the only option is paypal - I get the feeling that this business isn't profitable enough, or well established, or however you want to put it, enough to have a merchant account. 

I'd look for alternatives to paypal.

I think Betty makes an excellent point. I do pay a few services via PayPal, usually they are higher dollar amounts, and of course I pay for any ebay purchase using PayPal. BUT ... when I'm shopping for an item on a retail site, I won't bother with most sites that only offer that payment option unless they are the only people who sell the item I'm looking for.

Several years ago, PayPal had some real problems which turned a number of eBay'ers off to it, you can see that still on a number of listings "We DON'T accept PayPal". I think it was something about security of personal data, but I don't remember. So there is a bias out there because of that. But mostly my sentiments are the same as Betty's ... start-up shop that isn't very sophisticated, and possibly not trustworthy. I like buying from small shops, but I want to know they are committed to service, and accepting payment directly speaks to credibility in my mind, whether that's fair or not.

FWIW, I offer PayPal for those customers that would prefer not to give a merchant their personal info and prefer to work w/ a single payment processor for online purchases. It is also useful for those who want to pay w/ Discover, AMEX or check, as I only offer VISA and MC payment options via my merchant acct (Discover & AMEX require additional agreements and charge more than VISA & MC).

BUT ... only maybe 2% of my customers use PayPal, so there is a definite preference for dealing directly w/ the merchant in my experience. I honestly think you are probably losing a lot of business with PayPal as your only payment option. My merchant account cost me less than $40 / mo when I had low volume, only a little more with my current volume ... I'd seriously consider trying it for 3 or 6 months and see what kind of difference it makes. It would be worth $120 to me to confirm my suspicions. Of course there is the cost of using a "real" cart system too, but still ... if you are getting traffic, I'd bet you are hurting yourself.

[waveshoppe]

Hi everyone, we use paypal for our payment processor, but it is integrated into a 3rd party merchant cart. Because of our sales volume we only pay 2.2% so you can have a very inexpensive cart that does not spotlight paypal. (I will post a link if admin’s request it)

When choosing a cart you need to think about Options, something the basic paypal does not offer like ease of use, shipping options, order management, payments for downloads, gift certificates, offer codes, etc.

IMO If you can not afford to invest $30 to $50 a month in your business, you should simply close up shop.