An expedited payment process can help improve conversion rates for some e-retailers, a study finds.
Improving conversion rates is a key goal for online retailer. PayPal, the payment services unit of eBay Inc., has released results of a study conducted by web measurement firm comScore Inc. that shows its PayPal Express Checkout service had a higher conversion rate at 15 e-retailers than non-PayPal payment choices.
In the comScore analysis conducted from Dec. 2010 through Feb. 2011, customers choosing PayPal Express Checkout completed 59.1% of their purchases compared with 27.5% for those customers choosing non-PayPal methods. PayPal Express Checkout enables a consumer who has a PayPal account and prefers to use the payment service when she shops to click a “check out with PayPal” button at the start of the checkout process. That takes her to a PayPal-operated site where she signs in with her PayPal user name and password. PayPal then communicates her stored shipping, billing and payment information to the e-retailer, eliminating the need for the consumer to type in her details. Transactions can be made using funds held in the PayPal digital wallet, or with a credit card or bank account stored in the PayPal account.
Higher conversion rates equate to more revenue for e-retailers, PayPal says. “Checkout abandonment can occur for many reasons. Shoppers don’t want to create a new account for every web site. They may not trust the security of the site. There are too many steps in the checkout process,” says a PayPal spokesman.
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