Driving Incremental Internet Sales Pay Pal Carl Scheible

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Presentation from "The future of Cards and Payments 2008".

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Driving Incremental Internet Sales Pay Pal Carl Scheible

  1. 1. Driving Incremental Internet Sales IEA & Marketforce: The Power of Payments London, July 3rd 2008 Confidential and Proprietary
  2. 2. Agenda • PayPal introduction • Addressing the three biggest problems in e-commerce payments • The merchant benefit: incremental sales Confidential and Proprietary 2
  3. 3. PayPal overview Founded 1998 and acquired by eBay 2002 Facilitates online payment by card, bank, and balance Operates in EU under a Luxembourg bank license $47B total payment volume (33% growth) in 2007 190 markets & 44% of revenue from outside U.S. Millions of #1 EU and UK financial website (Nielsen) PayPal user 175 accounts 120,000+ European merchant websites 57M accounts 133 active during 50M+ European accounts 2007 ~10% of global e-commerce 96 64 40 23 12 5 2000 2001 2002 2003 2004 2005 2006 2007 Confidential and Proprietary 3
  4. 4. Agenda • PayPal introduction • Addressing the three biggest problems in e-commerce payments • The merchant benefit: incremental sales Confidential and Proprietary 4
  5. 5. The three biggest online payment problems 50% don’t complete Checkout abandonment 40% very concerned Concern about privacy, security, and safety 24% seek alternatives Choice of all preferred payment methods Sources: Shop.org/Forrester, 2007; Forrester, 2007; Jupiter/PayPal, 2008 Confidential and Proprietary 5
  6. 6. Problem #1: checkout abandonment Checkout abandonment Need for easier checkout 100% 90% 80% • 31% of shoppers prefer to shop at 70% stores that don’t require them to retype 60% 50% their name, address, and card number. 52% 51% 50% 40% 46% 30% • 48% of shoppers prefer using 20% alternative payments because they are 10% more convenient. 0% Web-based Store-based Catalog-based Average Source: Shop.org/Forrester, State of Online Retailing 2007 Source: JupiterResearch/PayPal, “Confidence, Convenience, Choice”, 2008 Enter Enter Enter Enter Enter name and Add Merchant buyer delivery card card Confirm Process 50% Checkout personal shipping address address number & security basket payment info costs conversion data data date data Login to Review 80% PayPal payment conversion Confidential and Proprietary 6
  7. 7. Problem #2: concern about privacy, security, and safety Online shopping privacy concern 100% 90% 80% 12% of European 70% adults (21% of 60% internet users) avoid 62% 61% shopping online due to 50% 40% security concerns. 44% 40% 40% 30% Source: Eurostat, 20% Feb 2008 10% 17% 0% UK FR ES Average IT DE Source: Forrester, Security Concerns Impact European Online Behavior, July 2007; % shoppers rating themselves (very) concerned Payment accounts protect financial info “I like the security that PayPal offers. I don’t like giving my card details out directly to any company.” Confidential and Proprietary 7
  8. 8. Problem #3: choice of preferred payment methods Cards: Payment Bank: US,CA,UK,DE(EFT,ELV,giropay),FR,ES,NL,CH,AU Methods Balance: 65 countries Confidential and Proprietary 8
  9. 9. Agenda • PayPal introduction • Addressing the three biggest problems in e-commerce payments • The merchant benefit: incremental sales Confidential and Proprietary 9
  10. 10. 1-5% incremental sales for the largest merchants; 5-25% incremental sales for medium-sized merchants* Methodology: Over a two-week period, 100% of PayPal buyers from leading European websites were asked, “Would you have made your purchase from [this merchant] if PayPal had not been offered as a payment option?” % that would PayPal’s % not have x share of = Incremental bought without merchant’s sales PayPal sales UK large retailers 25% 10% 2.5% 24% 12% 2.8% Boots, eBuyer, Envisage, 14% 22% 3.1% Expansys, Photobox, SVP 25% 14% 3.5% 23% 15% 3.5% 66% 7% 4.6% France/Italy/Germany retailers 21% 2% 0.4% 19% 5% 1.0% France – Aquarelle, 30% 3% 1.0% BrandAlley, Cdiscount, Fnac, 18% 8% 1.4% Meetic, Pixmania 30% 5% 1.5% 32% 6% 1.9% Germany - Blume2000, 22% 10% 2.2% Buch.de, Computer Universe 36% 7% 2.4% 57% 5% 2.8% Italy - Mr. Price, 3, Yoox 42% 8% 3.4% 27% 20% 5.4% 28% 30% 8.4% * Sources: comScore (14% US SMB), IZH4 study (7-13% Germany), PayPal consumer and merchant surveys Confidential and Proprietary 10
  11. 11. Drivers of incremental sales from PayPal % Privacy – not sharing info 27 Trust PayPal/PayPal is 11 reliable Safety 42% PayPal Buyer Protection 4 % Convenience 30% No need to retype details 24 Just a few clicks 5 Keep track of payments 1 Payment Methods 17% % Wanted to use PayPal balance 7 Don’t have credit card 4 Loyalty 7% Couldn’t use preferred card 3 Wanted to use bank account 2 Cross border payment 1 Other 4% 0% 20% 40% 60% All Respondents (474) Confidential and Proprietary 11
  12. 12. Merchants of all sizes adopting PayPal 120,000+ active web merchants 15 of top 50 10 of top 50 15 of top 50 Confidential and Proprietary 12
  13. 13. Thank you!!! cscheible@paypal.com Confidential and Proprietary 13

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