PayPal: Payments are sexy!

Presentatie Dennis Van Allemeersch, Country Manager PayPal Benelux 28 November 2007

AGENDA
PayPal ?
Payments are sexy !

PayPal - toonaangevend in online betalingen
Onderdeel eBay Inc.
Opgericht 1998
153 miljoen rekeningen wereldwijd; 35 miljoen daarvan in Europa
$38 miljard betaalvolume p.a.
>1.2 miljoen transacties per dag: 342 transacties /seconde in Q4’06
190 landen, 17 valuta’s
>8.000 medewerkers wereldwijd
Banklicentie in Europa
Aantal PayPal-rekeningen (miljoen)

Kerncijfers PayPal Nederland ( www.paypal.nl )
1,4 mln rekeningen
Groei 30-40% per jaar
+/- 30% actief (ie transactie in de laatste 3 maand)
Aangeboden bij 17% Top 1000 Nederlandse webwinkels
Naamsbekendheid >40%
Veilig
Bron: E&Y ICT Barometer 2007

PayPal biedt een unieke klant ervaring € PayPal-rekening Bankoverschrijving 2 PayPal-saldo Creditcards PayPal-rekening koper € PayPal-rekening verkoper Betaalbronnen 1 Online machtiging Bank Nieuw !
Veilig (dmv. zgn. Random deposit verificatie upfront)
Incasso risico verschuift van de verkoper naar PayPal !
Let wel ! Als de verkoper PayPal aanbiedt, hoeft de koper niet noodzakelijk een PayPal account te hebben om via PayPal te kunnen betalen (gaat dan via beveiligde PayPal credit card omgeving) 3

PayPal kenmerken Prijs hangt af van de gemiddelde maandomzet die via PayPal loopt. Deze wordt automatisch berekend en gaat dus ook automatisch naar omlaag naarmate u meer omzet via PayPal doet (bv agv. groei van uw webwinkel).
UNIQUE SELLING POINTS
Snel
In paar klikken rekening geopend
Betaling vindt onmiddelijk plaats (en verzending dus ook)
Gemakkelijk
Gegevens hoeven niet telkens opnieuw ingevoerd te worden
Lokatie onafhankelijk
Je hoeft je token of betaalpassen niet meer bij de hand te hebben
Toegang tot wereldwijde klantenbasis
Prive
Persoonlijke en andere gegevens worden niet gedeeld
Veilig dmv fraudepreventie
Bekend & vertrouwd (eBay Inc.)
Prijs (voor MKB)
≈ Credit card inkoopcombinatie
BE AWARE
PayPal werkt in NL obv credit cards en online automatische incasso =>
Storneringsrisico blijft
Prijsopbouw vergelijkbaar met die van credit cards (ie ook een ad valorem deel), echter:
Geen kosten om rekening te openen
Geen kosten om PayPal te integreren
Geen maandelijkse fees
Geen kosten om geld te sturen, op te nemen of toe te voegen
Webwinkel betaalt alleen wanneer van PayPal gebruik gemaakt wordt:

Payments are sexy !!
Vision on the changing role of payments within web shops
Visitors Conversion Sales After sales Sales funnel Choices with regard to accepting and integrating payment methods for your web shop can affect your complete sales funnel, from traffic until after sales !! Which key questions to ask ? Questions which are not high enough yet on the web shop's CEO agenda - Based on some PayPal best practices - More traffic + Higher conversion = Incremental sales at higher margins

Visitors / traffic
Re-active
Do I exclude certain visitors beforehand (unconsciously) ?
Or do visitors drop out because of the payment methods offered ?
Pro-active
By offering certain payment methods, can I attract extra visitors ?
Question - Do I reach the maximum audience possible with my payment methods offered ? - +

Re-active
More and more consumers shop cross-border (XB)
More and more web shops sell cross-border (EU av. 2006: >30% was XB sales !)
Advice 1 - Ensure that the payment methods offered are able to cope with the internationalization of e-Commerce Ensure that your web shop is ready to take XB opportunities, not only in terms of logistics, but also in terms of payment methods offered. With regard to payments, you can integrate all different local payment methods, or offer a world-wide accepted standard … like PayPal

Re-active
Small merchants often face 2 challenges with regard to payments:
To get an acquiring contract (for accepting credit cards) to begin with
To inspire trust to their visitors for safe to buying & paying at their shop
The chosen payment method can help with both.
Advice 2 - The choice of payment methods can also inspire trust to smaller web shops

Pro-active
E-mails
Advice 3 – To generate extra traffic, check if a co-marketing deal can be made with the payment provider PayPal Shop

Pro-active Advice 4 – Check which is the preferred payment method for buyers Source: Blind buyer survey conducted In July and September 2007 Preference by payment type Percentage of EU-7 internet shoppers, 2006

What Consumers Want in the Online Channel 33% of online shoppers abandon checkout because it takes too long to complete. Websurveyor, June 2006 Convenience Confidence 80% of consumers would be more inclined to purchase online if given a safer, more convenient payment method than credit cards. Javelin Strategy & Research, April 2007 Choice Cash and checks continue to represent 65% of all retail payments. U.S. Department of Commerce Statistics Conversion Question – Do I offer buyers the best possible user experience ? Consumers would be more inclined to purchase online when merchants would meet the consumer's expressed desire for confidence, convenience and control — the 3C’s of online payments.

How Does Express Checkout Work? Input ID info Input payment data Input delivery address data Confirm basket Process payment Input buyer address data Add shipping costs Login to PayPal Review payment Standard Checkout 65% conversion 80% conversion With Express Checkout, the checkout process is reduced to a couple of clicks, driving significant conversion improvements. Source: comScore Conversion Study, Q2 07 Conversion Advice 5 – To minimize the number of steps and data entry fields really makes a significant difference £

Conversion : Harrods.com checkout experience

Some appear to be cheap upfront …
After Sales Question – How do I limit the net cost of any given payment method ? … but turn out to be costly afterwards Average financial loss* for webshops is 140 bpts ! * incl. fraud loss and chargeback loss, but excl. operating costs !

After Sales
Gain sufficient information & control upfront with regard
to payment methods
Check financial details upfront (eg.random deposits)
Raise spoof & phishing awareness & take countermeasures
Try to implement real-time checks as well
Real-time fraud checks on all transactions
Advice 6 – Better be safe than sorry Last 12 months PayPal succeeded in reducing the number of spoof & phishing attacks with 90%!

After Sales
Price
Work on no cure, no pay basis ? (ie are there set-up and/or subscription fees)
Fraud losses
Does the provider compensate chargeback losses ?
Does the provider compensate non-sufficient-funds losses ?
Integration costs
Does the provider cover (part of) the integration costs ?
Advice 7 – It’s not just the basic price. Take the complete financial package offered into consideration, too.    (for large merchants) X (only in certain cases)

After Sales Advice 8 – Be aware that some payments methods are cheap to use, but expensive to implement & to maintain

After Sales
For PayPal merchants the av. financial loss (due to fraud & chargebacks) is +/- 0.3%
vs.
1.4% for webshops in general
Advice 9 – Make sure you dispose of the tools & insight to address after sales issues adequately & efficiently

Summary – 9 advices
Ensure that the payment methods offered are able to cope with the internationalization of e-Commerce
The choice of payment methods can also inspire trust to smaller web shops
To generate extra traffic, check if a co-marketing deal can be made with the payment provider
Check which is the preferred payment method for buyers
To minimize the number of steps and data entry fields really makes a significant difference
Better be safe than sorry
It’s not just the basic price. Take the complete financial package offered into consideration, too
Be aware that some payments methods are cheap to use, but expensive to implement & to maintain
Make sure you dispose of the tools & insight to address after sales issues adequately & efficiently

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PayPal: Payments are sexy!

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PayPal: Payments are sexy! — Presentation Transcript