Online checkout abandonment drives e-commerce retailers crazy. Many online sites require multi-clicking and long keystroke entry on laptop and mobile keyboards, a process that often drives shoppers away. As the following Barron’s article reports, PayPal has become a market leader in putting convenience and brevity into the online shopping process much to retailers’ relief.
No waiting on long checkout lines. No frantically hunting for a space in a crowded parking lot. Along with the big discounts, the convenience of mobile e-commerce is making it an unstoppable trend.
Though Amazon.com gets the lion’s share of the online sales buzz, almost every other retailer, including Walmart, Target, and Best Buy, is quietly leveraging one common weapon to compete against the internet juggernaut— PayPal .
So how has an old-school internet payments company, PayPal Holdings, become an essential arms merchant in the raging war for e-commerce dollars, and why is it flourishing in the transition to smartphone e-commerce?
The simple answer is that while Amazon doesn’t need PayPal, everyone else does. PayPal is thriving because companies are clamoring for a neutral, trusted digital intermediary for payments, and its platform of 254 million active accounts drives higher sales.
Consumers do not want to retype their personal and payment information every time they order from a different online retailer. As a result, PayPal benefits as it offers the ability to quickly check out in a simple, hassle-free way on the 20 million merchant websites that offer its payment solution.
Merchants have greatly improved their online websites, especially for mobile browsing and buying, but this can still be a navigational nightmare for shoppers. PayPal discovered early on that consumers like convenience and consistency in their buying habits. Spinning off from e-Bay was probably the best thing that could have happened for PayPal. Now they are the online payment method of choice for consumers and merchants alike.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group