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  1. #1
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    Conversation rates increase with actual merchant account?

    Hello all,

    I am going to brutally honest here. I have an e-commerce business that only accepts paypal payments (the one where the customer actually has to pay through the paypal website). Unfortunately, I don't have any established credit so I couldn't get the paypal pro version (where a customer can enter their credit card right on my e-commerce store). Now, the reason I don't have a merchant account is because I am a college student with no money, no credit, so I don't think it would be too easy to set up a merchant account.

    So, my e-commerce store only has paypal checkout, no credit cards, no google checkout, etc.

    Now, my question... what percent would my sales % increase if I was to allow customers to enter their credit card on my website? Has anyone been in this situation where they only had paypal, and then they got a merchant and seen their sales skyrocket?

    Thank you very much for any input!

    Happy Holidays!

  2. #2
    SitePoint Wizard webcosmo's Avatar
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    it might slightly increase your sales over time, but i dont think that would be a huge huge difference.

    there are tons of other payment processing systems you could use besides paypal though. authorize.net is one to mention.

  3. #3
    SitePoint Wizard silver trophy
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    It depends on your customer base. On an ebay store you may see a minimal increase while a site selling say gift baskets against well known brands could double, it's very hard to project. When you look at your ecommerce funnel now what is the abandonment rate like when people click from their cart to paypal?
    - Ted S

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    webcosmo, thanks for the alternative. I heard of authorize before so I will check it out!

    Ted S, unfortunately I don't see any way to do that in google analytics, so I am guessing I will have to set up a funnel and then wait a bit to look at the results, thanks!

    I am glad that I am probably not missing out on a ton of money!

  5. #5
    SitePoint Zealot vassilevsky's Avatar
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    You say you have no credit. PayPal, as you know, has one. So when instead of paying with PayPal they will have to enter their card info on your site - where will conversion rate go? Think about it.
    Usus magister est optimus.

  6. #6
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    Quote Originally Posted by smateo38 View Post
    So, my e-commerce store only has paypal checkout, no credit cards, no google checkout, etc.

    Now, my question... what percent would my sales % increase if I was to allow customers to enter their credit card on my website? Has anyone been in this situation where they only had paypal, and then they got a merchant and seen their sales skyrocket?

    Thank you very much for any input!

    Happy Holidays!
    As Ted has mentioned you will want to dig into your analytics to determine where you are now and where you could be. Modifying the checkout can greatly improve your customers experience. A lot of users will simply abandon if you don't provide things like shipping rates or taxes.

    Paypal is a crutch for many, I would highly suggest getting a secondary payment system in place and let the user decide. There are many users who don't have an account and then while on the Paypal checkout page they abandon because they don't understand. Credit card is something you have control over and I think it looks much more professional.

    Just make sure you have the proper PCI compliance in place such as SSL certificate, etc and show your visitors your site is secure and safe to use. Let us know what you decide and if you do go with a merchant account make sure to provide us with your analytics

  7. #7
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    I've launched several hundred online stores (both personally and for clients).
    Your conversion rate will go up... but it won't necessarily 'skyrocket'.

    In addition to the payment method, the cart checkout process itself also makes a big difference (e.g. single page vs multi-page, etc).

    At the end of the day, your job is to get the customer from point A to point B as quickly as possible.

  8. #8
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    Thumbs up

    There's an article on http://www.creditscore.net about what you can do in a situation like yours (no credit but trying to start a business that involves paypal, merchant account, etc) might be helpful for you to check out - but good luck with everything, hope you figures something out!

  9. #9
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    Of course you will see an increase if you accept cc I would advise you to look at shopping cart abandonment rate before you make a move, it also depends with the product you sell and consumer base

  10. #10
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    Since you're looking at merchant accounts, you might want to read the following from this thread. Its a pretty detailed summary of what to expect.

    The information maybe a little outdated with rates and such. I know of a merchant account provider charging less than what was stated in the spoiler. Since you're going to be doing research and comparisons anyway, try starting out with http://www.socialbusinessbank.com/interchange-plus.php as your point of your reference.
    Last edited by Mittineague; Mar 11, 2011 at 12:02. Reason: fixing link

  11. #11
    SitePoint Addict WilliamW_321's Avatar
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    Paypal is simply too intent on promoting PayPal
    and is not nearly as concerned about your conversions.

    Use a real time gateway like Authoriznet and then
    keep PayPal as an alternate payment option for your
    customers.

    A decent shoppingcart will allow you to run both at the
    same time. The challenge comes into play when you want
    to use PayPal with recurring billing as only the top
    choppingcarts will be compatible with Paypal for setting
    up recurring payments and trial periods i.e. Try it for
    14-days for $1 and then pay $30 per month thereafter.
    PremiumWebCart
    Memberships, Up Sell, Affiliate, CRM, Project Mgr, See More


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