As you'd expect, Shopify works beautifully with Paypal so when we moved to the platform last year, we decided we'd offer Paypal as an option. It was literally a case of ticking a box - Shopify does it all for you, easy. The snag? Paypal is bloody expensive! We're paying a chunky 2.9% plus .35c per transaction! That is more expensive than Stripe, which we've already blogged about as expensive option for merchants in Ireland due to the high number of VISA DEBIT transactions which would not normally attract a % commission.
So the obvious question to ask is whether Pay Pal is worth it? Does Paypal increase conversion rates in Irish e-commerce stores. The honest answer is that I'm not so sure in our own particular case. Globally, it does appear that having Pay Pal as an option does increase conversion rates but I couldn't find any hard statistics to back this up. The general consensus is that Paypal is not going to hurt your e-commerce conversion rates so what have you got to lose? Well, you have about 1.5% in commission to lose for starters!
But let's look again. Paypal is a seriously trusted brand with over 165 million active customer accounts. A lot of people use PayPal to pay online and if your e-commerce store is not offering PayPal are you potentially losing out on sales? Of course you are! On our store, we see PayPal transactions on a daily basis but short of asking every customer or turning off Paypal for a period of time and then measuring the sales and conversion rates, we have not way of knowing how many of those sales we'd get without PayPal.
There's another issue at play here and this goes back to the Shopify integration with PayPal. Until Shopify rolled out their new responsive checkout, they pushed PayPal as a payment option first and then offered the other payment options. I did wonder how many customers used Paypal even when they didn't actually have a PayPal account. With the new responsive checkout on Shopify, that is not the case and PayPal is the last option - not the first. So now, we can say with confidence that people selecting Pay Pal are doing it consciously - not by accident.
The bottom line for The Canvas Works? We're sticking with PayPal - yes it's expensive and for a small business like ours, the extra commission hurts but offering Pay Pal on your site is logically going to increase your conversion rates and allow you to tap into a global user base of 165 million accounts. It doesn't take much in extra sales to make up for the commission and giving your customers a wide choice of payment methods can only be a positive thing.