Are you a low margin online business and PayPal fees eating into your margins?

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Want to reduce PayPal fees?

Before you attempt that, you need to know why your customers use PayPal on your site and this post covers this aspect.

So, here are the top reasons why customers use PayPal on your site (not in any specific priority order)…

#1 Trust

I trust PayPal and feel more comfortable using PayPal on smaller and not so well known sites.

Apart from PayPal brand recognition, PayPal buyer protection plays a big role in building the trust.

#2 Convenience

I love PayPal OneTouch. It’s very convenient to use.

Features like OneTouch and overall ease of use especially on mobile devices is one of the reason customers may prefer PayPal over traditional payment methods.

#3 Use my balance

I would like to use the balance which I have in my PayPal account.

Sometimes customers may have balance in their account due to refunds from past purchases or money received from friends and they would like to use that.

#4 PayPal Offers

PayPal sends me offers which saves me money.

From time to time, PayPal runs exclusive promotions for retailers accepting PayPal .

Also, In UK in 2016, PayPal ran a promotion to cover return shipping costs for up to £15 and 12 returns in an year if the customer originally paid using PayPal.

Source: PayPal

#5 Amex cashback

The site doesn’t accept American Express. I can work around that by using PayPal.

Some retailers do not accept American express and customers with Amex cards don’t want to lose their cashback rewards.

Since there is no additional cost for customers, it’s no-brainer for them to use Amex card via PayPal and still earn cashback.

#6 PayPal Credit

I was short on money but with PayPal credit I was able to make my purchase immediately.

PayPal Credit is a simple and flexible credit line that sits alongside your PayPal account. It is a paperless, card-less revolving credit limit.

*PayPal credit offerings may differ from country to country.

Source: PayPal

#7 Pay after delivery

With Pay After Delivery, I don’t need to pay for my purchase until after I have received the item.

This is a very attractive feature for the customers as they do not need to pay upfront (“Try before you buy”)

*Not all customers and all purchases may be eligible for this.

#8 Works with mobile wallets

I can use PayPal with android pay.

In April 2017, PayPal announced that it will allow Android Pay users to tap their credit and debit cards stored in PayPal (via Android Pay) and to use any cash balances they keep there.

Aware of any more reasons for customers to prefer PayPal over conventional payment methods? Please comment on this post and let me know and I will be happy to update this story.

If you are interested in this topic, follow me on Medium. There will be another post soon with some ideas on how the retailers can cut down on PayPal fees without impacting conversion.