If you’re a merchant who intends to accept payments online, then you need a way to channel the funds from your website’s online shopping cart to the bank or through a credit card company. Primarily the credit card should be the one that you expect the most of your consumers to use in order to pay for the transactions they make on your website.
While banks in North America offer merchant accounts, very few offer the expertise necessary to process internet payments made with a credit card. This is where PayPal comes in handy. It handles all aspects of payment processing for your business which frees you up and gives you the time necessary to handle the business itself.
PayPal Offers Stability
Most merchants prefer using PayPal. Founded in 1998, this is one digital wallet service that hit the ground running. It out-processes any other type of electronic payment company and money transfer service in the world, and has for more than a decade. People from around the world use PayPal.
For example, if you’re a merchant based in Vancouver, then thanks to online shopping carts with PayPal you can sell to people from Argentina to Zimbabwe. While you could go with a merchant account or other credit card processing service, PayPal is a third-party vendor whose sole purpose is to process online payments.
And because 23% of the people shopping online prefer to shop with PayPal, seeing the PayPal button on your website gives your customers an extra sense of security. They know that if something goes wrong on either end of the transaction, PayPal is there to mediate things and help find a resolution.
PayPal has Credibility
The bottom line is that everywhere you look PayPal’s revenues are rising each year based on merchant transactions alone. According to the website Statistic Brain, when it comes to global e-commerce, nearly 20% is represented by PayPal. Here are some other facts by the same source.
- PayPal boasted more than 105 million accounts in March of 2012.
- In 2010, PayPal reported more than $3.4 billion in total revenue.
- PayPal is involved in nearly 200 markets across the globe.
- More than 340,000 internet websites use PayPal as a way for customers to pay for their online purchases.
- PayPal allows for the use of more than 2 dozen currencies.
But perhaps best of all is that when it comes to recommending PayPal services to others, a whopping 86% of those who use the service agreed that they would. It’s not difficult to see why. The service is safe to use. For example, unlike using personal checks, there is less of a risk of someone stealing your identity.
The Relationship between PayPal and eBay
Trefis, a stock analysis company, reported that in the last quarter of 2011, eBay “enjoyed a large top-line upside to its GMV (Gross Merchandise Volume) and TPV (Total Payment Volume) metrics for the last quarter, which grew by 10% and 29% respectively.” This is important because while eBay owns PayPal.
In its Q4 earnings release for 2011, eBay reported that the TPV that PayPal generated from eBay transactions was nearly 35% of its total for that entire year. This means if eBay stock is valued at $49.80 per share, then more than $17 of the value of that stock is based solely on how PayPal performs. When you consider that $23 of the stock represents value of the eBay Marketplace alone, that leaves just over $9 which is represented by 4 other factors.
Is PayPal Right for Your Business?
If you’re still asking yourself this question, the answer is yes. PayPal is compatible with more than 300 types of online shopping carts, which makes integrating the service into your site easy. And once you have that down, your customers will find that it’s easier to both shop on your site and pay for their items.
And where are the customers? They’re everywhere. They are the bored office workers slacking off and shopping from the office computer. They are the young moms and housewives shopping online while the kids nap or watch the latest trend of singing, costumed creature. And they are even the college students shopping from smartphones and iPads while taking public transportation.
In a world where it’s easier than ever to shop online, it’s important to make it easy for consumers to shop on your website. That includes having features on your site that are mobile-enabled for those who like to shop on the go and, of course, having your online shopping cart linked to PayPal.