Accepting PayPal On Your Auto Parts eCommerce Store

If you’re an online retailer thinking about accepting PayPal, this article is for you. We’ll talk about why accepting PayPal is a good idea, PayPal’s different products/services, and give you some tips for getting started with PayPal as a retailer.

By the way, PayPal has a page on their website that explains their different offerings. We find it confusing and vague, which is a big part of the reason we created this article. If someone who works at PayPal ends up reading our article, please fix this page.

Are shoppers abandoning their carts because PayPal isn’t an option?

Accepting PayPal Will Probably Increase Your Sales

According to PayPal, there are 267 million people who have a PayPal account and use it regularly. While most of these accounts are probably outside the USA (PayPal’s website doesn’t break out accounts by country, surprisingly), it’s still a huge number of users. If only 10% of PayPal’s active accounts are in the US (and that seems very low), that would be about 10% of the adults in the US who bought online in 2018.

Put another way: Perhaps one in ten of the people who buy online have a PayPal account. If your company doesn’t accept PayPal, you might be losing 10% of your potential business as a result.

The main reasons that consumers like PayPal would seem to be:

  • PayPal is widespread and trusted. It’s been around for more than 20 years now, and it’s accepted by millions of merchants.
  • It’s easy to use PayPal. You can connect it to your bank account or associate it with a credit card, and then pay everything thru PayPal without sharing any bank or credit card info.
  • PayPal protects consumers. PayPal has a pretty rigorous purchase protection program for buyers, which can be a sore point for retailers (more on that below) but is a popular feature with consumers.
  • PayPal is basically free for consumers. PayPal doesn’t charge consumers for most things, which they love (of course, it means businesses that accept PayPal pay for everything).

PayPal also has some nice features for businesses:

  • PayPal offers a PayPal Credit financing program to qualified buyers. If your company sells a product that costs several hundred dollars (or more), accepting PayPal can be a good way to boost sales.
  • PayPal has a Seller Protection program that guarantees payment. As long as your transaction meets PayPal’s rules, it’s protected from fraud or charge-backs.

While we don’t have any certain statistics, we believe that accepting PayPal on your ecommerce website is a good way to increase online sales, at least a little bit.

If PayPal Is So Great, Why Don’t All Businesses Accept It?

While many consumers love PayPal, a lot of businesses don’t. Based on our conversations with clients, the main reasons that businesses don’t accept PayPal tend to be one or more of the following:

  • PayPal buyers aren’t always valid. While PayPal has a Seller Protection Policy, retailers don’t always understand it. As a result, retailers can sometimes sell a product via PayPal only to have the charges reversed later.
  • PayPal accounting isn’t always easy. PayPal’s system for tracking transactions doesn’t always jive with a retailer’s favorite accounting tool or system. It’s a minor issue, but it has come up a lot in our conversations with retailers.
  • PayPal charges a pretty hefty fee, relatively speaking. While PayPal’s processing fees aren’t massive – they’re about 3% – that’s higher than the 2.2% to 2.5% fees that a lot of credit card processors charge.
  • PayPal can place a reserve on your account. PayPal account reserves aren’t common in our experience, but if you read any reviews of PayPal’s business offerings, you’ll undoubtedly see complaints about their reserve policies.
  • PayPal can be challenging to implement on some ecommerce platforms. While the vast majority of ecommerce websites have built-in PayPal acceptance, there are situations where accepting PayPal is a bit of a technical challenge.
  • PayPal checkout can be off your site. We explain this in more detail below.

Accepting PayPal Can Mean Customers Checkout Off Your Site

When someone adds a product to the cart and starts the checkout process, they can pay with PayPal either on your site or off it. To clarify:

  • Someone who pays on your site will never leave your domain – when they get to the checkout page, they’ll punch their credit card number in and/or login to PayPal on your website. This is generally considered to be good.
  • Someone who pays off your site will go to PayPal.com to login and complete payment. When they’re done, they’ll be redirected back to your site.

When people leave your site to complete the checkout process, a few things can go wrong.

  • They could become concerned about being taken to PayPal – this is not a typical checkout path, and that can cause some people to worry.
  • They could change their mind about buying something after they see their PayPal balance.
  • Your website could lose the transaction, meaning the customer isn’t able to complete their order (this shouldn’t happen if things are setup correctly, but things aren’t always setup correctly).
  • Your analytics tracking could break, meaning you can’t accurately track a sale back to a traffic source.

The last problem – broken tracking – is the most common. We see lots of Google Analytics accounts that list PayPal as a traffic referrer. While there is a fix for this issue, not every ecommerce platform has the fix in place.

So, Should My Company Accept PayPal?

In our opinion, yes. None of the problems outlined above should keep an online business from accepting PayPal. All of them can be overcome with good processes and effort.

Still, it’s good to go into these things with your eyes open: accepting PayPal is a good way to increase sales, but accepting PayPal also requires care and diligence.

Before You Can Accept PayPal, You Need To Pick A Plan

As of this writing (early 2019), PayPal has three basic types of plans for businesses that want to accept PayPal.

NOTE: If you want to skip all of this and see what we recommend, just scroll down to the bottom. The explanation of all the different plans gets a little ugly.

Plan Type 1 – PayPal Checkout

PayPal’s latest plan is called PayPal Checkout, and it’s pretty straightforward:

  • You put the PayPal Checkout buttons on your checkout page
  • When the customer clicks, they can pay with PayPal, PayPal Credit, Venmo, or any major credit card
  • There’s no monthly fee, and it’s easy to setup on most websites

If there’s a downside to PayPal Checkout, it’s that your customers might see all the PayPal logos and think that they need a PayPal account to buy from you. This isn’t true, but it’s easy to understand why a consumer might think this…PayPal has made their checkout buttons huge, and they’re not bashful about putting their logo on them.

Plan Type 2 – PayPal Payment Systems

PayPal Payments Standard, PayPal Payments Advanced, and PayPal Payments Pro are all slightly different from PayPal Checkout. All are less obtrusive than PayPal Checkout in our opinion, and because they’re older offerings than PayPal Checkout, they are more compatible with ecommerce platforms.

There are a few key differences between the Pro version, the Advanced version, and the Standard version:

  • Businesses who pay the $30 monthly fee for the Pro version can keep customers on their site during checkout. The Pro version allows you to accept payments by phone, with a virtual terminal available.
  • Businesses who pay the $5 monthly fee for the Advanced version can also keep customers on their site, but the implementation is a bit klunky in our opinion.
  • Businesses who use the Standard version put a button on their checkout page that takes the customer to PayPal. It’s easy to setup, but it takes customers off your site, which isn’t always great.

While we recommend PayPal Payments Standard to most companies that aren’t currently accepting PayPal, it’s important to note here that you get what you pay for. While PayPal Payments Pro costs $30, you have a lot more control over the checkout experience when you pay, and this is generally a good thing.

The PayPal Payments Advanced option is a good price (only $5/month), but it’s a little weird to setup, we’ve had some problems getting it to work correctly for mobile users, and it seems like PayPal is going to stop offering it at some point (it’s very hard to find it on their website as of this writing). So, we don’t recommend that one. It’s either the Pro or the Standard, at least according to us.

Plan Type 3 – PayFlow Payment Gateways

Last but not least we have PayFlow Link and PayFlow Pro, which are both payment gateways. A payment gateway is a connection between your customer and your credit card processor. This means that when you sign up for PayFlow Link or PayFlow Pro, you still need a credit card processor.

So you only want to think about these if you have a processor you like, and you’re trying to find a way to offer PayPal without changing your processor…Confusing, right?

So…What’s The Best PayPal Option?

First of all, congrats on making it this far. This is a heavy, difficult topic. PayPal could make things a lot simpler by eliminating some options, and hopefully they will someday.

Second, we recommend PayPal Payments Standard to companies that aren’t currently accepting PayPal. Here’s why:

  • PayPal Payments Standard is the cheapest way to start accepting PayPal
  • Most ecommerce platforms integrate with the standard option without much (or any) effort
  • It’s the easiest way to see if PayPal boosts sales or not

If you add Standard PayPal to your site and find that a lot of your customers are using PayPal, you should investigate PayPal Payments Pro. It will solve the issue of people leaving your site (and the broken tracking problem that goes with it), and it’s old enough that most ecommerce platforms offer easy integration.

Summing Up – Offering PayPal is Mostly Good

While most of our ecommerce clients have complained about PayPal at one point or another, most of them also accept PayPal and have no plans to stop. A significant percentage of auto parts and accessories buyers pay with PayPal, and once you get accustomed to the platform, the headaches are minor.

Still, before you add PayPal to your site, we have some advice:

  • Make sure you understand the seller protection program. You can avoid costly mistakes if you check your PayPal orders before you fulfill them.
  • Make sure you test your PayPal integration carefully. When you add PayPal to your ecommerce site, you want to test it carefully. Check it on mobile devices; check to make sure it’s collecting money; check to make sure you’re getting the transaction data you need back from PayPal and into your ecommerce system.
  • Beware the PayPal ad reps/salespeople. A lot of our clients have been convinced by PayPal employees to add huge PayPal Credit banners to their homepage, make PayPal buttons bigger, upgrade to PayPal Pro, etc. These recommendations usually benefit PayPal, but we haven’t seen much evidence that they benefit website owners. So our opinion is to view PayPal rep recommendations with skepticism.

Questions? Comments? Hit us up on our contact form or give us a call!

More Content

The Best Third-Party Review Platforms For Parts And Accessories Ecommerce

One of the keys to selling auto parts and accessories online is trust. Trust comes from a strong brand, a nice-looking website, and lots of…

Read More

Domain Name And Hosting FAQs

If you are creating a new website or reconsidering your existing domain name and hosting arrangement, this post is for you. We cover the basics…

Read More

What’s A Good ROAS In Parts And Accessories Advertising?

Auto parts and accessories manufacturers and retailers that advertise need to understand return on ad spend (ROAS). In this three-minute video, Spork Marketing Founder Jason…

Read More
Auto parts in the cardbox. Automotive basket shop. Auto parts store.