PayPal as an Additional Payment Option

1
PayPal as an Additional Payment Option

• How Merchants Can Benefit When They Accept
  PayPal on Their Site

2
The PayPal Value Proposition

• 105M PayPal accounts 47 growth
• Significant online payment mark
• Adding 8M accounts per quarter
• 35B annualized payment volume 41 growth
• 10 of US e-commerce
• 5 of global e-commerce
• Accepted in 55 countries 6 core currencies
• 14 of payment volume from International
• Core currencies US, , , , CA, AUS
• Processes 1.2M transactions daily

PayPal user accounts
47 YoY growth
Millions
2001
2000
2002
2003
2005
2006
2004
3
PayPal Can Drive Incremental Volume
PayPal Transaction Platform
Transaction Volume Over 32 Billion/Year
Buyer Interest
Merchant Results

• Satisfied Customers
• New Customers
• Increased Conversion
• Increased Sales
• Lower Costs

• Customer Preference Convenience
• Safety Security
• Multiple Methods - Wallet Effect

Annualized volume based on Q4 2005 TPV
4
Offering PayPal Can Drive Incremental Sales

• Websites that offer PayPal as a way to pay reach
  a wider audience and can provide an uplift in
  sales on their site.
• For small-to-medium sized businesses, accepting
  PayPal as a payment option in addition to credit
  cards increased sales an average of 14
• Over 80 of the surveyed merchants reported a
  sales increase, and the increase typically
  started within two months
• The increased sales were incremental lift, and
  did not take away from current credit card
  volume
• According to an Internet Retailer study, 42.2
  responded that accepting alternative payments
  (such as PayPal) have increased sales
• Source -- Q1 2006 PayPal phone survey of 110
  small and medium sized business doing a minimum
  of 120K in annual online sales
• Internet Retailer, November 2005

5
PayPal Drives New Customer Acquisition
83 of customers paying with PayPal were new
customers to PETCO.com Heather Blank Dir. of
Business Development and Marketing, PETCO.com
30 of PayPal transactions generated new
customers for Go Daddy Michael Zimmerman CFO, Go
Daddy
86.8 of the people who paid with PayPal were
new customers to Tiger Direct Lonny
Paul Director of eCommerce, Tiger Direct
6
PayPal Users Shop More Frequently and Spend More
than Non-Users
Frequency of Purchasing Online (once per month or
more)
Average Monthly Spending Online
Source August 05 IPSOS RDD (random direct
dial) survey of 800 past 90-day online shoppers
Knowledge Networks RDD Panel, Dec. 04 past
90-day online shoppers
7
Major Online Payment Option
PayPal is more popular than debit cards for
online payments
8
Online shoppers are concerned about identity theft
of PayPal shoppers who worry about
Source PayPal, Q3 2005. Survey of PayPal buyers.
N 584
9
Leading Global Brands Accept PayPal
10
PayPal as an Additional Payment Option now
Integrated with the Payflow Gateway

• Benefits of using the Payflow gateway
  integration
• Easier integration that leverages Payflow Pro SDK
• Consolidated reporting
• Reference Transaction functionality on credit
  card payments
• Recurring Billing functionality on credit card
  payments
• Combination of gateways Fraud Protection Service
  and PayPals internal fraud models
• More options
• SDKs for additional operating systems and
  programming languages
• Reporting API for retrieving scheduled and ad hoc
  reports

11
PayPal Express Checkout Banner in Manager --
What a Merchant Sees
12
Adding PayPal as an Additional Payment Option

• Two Integration Options
• PayPal Express Checkout
• PayPal Standard Checkout

13
PayPal Express Checkout

• PayPals Express Checkout lets your customers pay
  quickly and conveniently.
• With PayPal Express Checkout, your customers get
  the fastest, most streamlined PayPal checkout
  experience. PayPal Express Checkout is highly
  recommended for merchants familiar with API
  programming.
• Your customers select items to purchase and
  proceed to check out. When your customers choose
  to pay with PayPal, they are securely transferred
  to PayPal.
• Your customers also have the option of using your
  existing checkout for credit card payments.

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PayPal Express Checkout

• With PayPal Express Checkout, customers who
  choose to pay with PayPal are sent to secure
  PayPal-hosted pages to approve using PayPal to
  pay. The PayPal-hosted pages can be customized to
  match the look and feel of your website.
• Once your customers approve the use of PayPal,
  they are automatically returned to your website
  to complete their order and pay. PayPal accepts,
  authorizes, and processes the payment
  instantaneously.
• Once the payment is successfully processed, the
  funds are deposited directly into their PayPal
  account and can be withdrawn or transferred to
  their bank account easily.

15
Benefits of using PayPal Express Checkout

• Can be used as additional payment method with an
  existing merchant account, and as a stand alone
  solution for merchants without a merchant account
• Available for domestic and international
  merchants (7/06) to sell in US, Canadian,
  Australian, Euros, Pounds, and Yen.
• Economical pay as you use it model
• Instant processing and there is no approval
  process
• Integrated to the Payflow Pro gateway
• Merchant owns more of the check out and
  confirmation pages

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PayPal Express Checkout Flow
API
API
API
17
PayPal Express Checkout Merchant Placement
Options
PayPal placed before shipping and billing address.
Checkout
Shipping
Billing
Order Done
Review Order
CONT
ORDER
CHECKOUT
Payment request made to PayPal.
PayPal Review
PayPal Login
CONTINUE
LOGIN
PayPal placed with other payment methods.
Checkout
Shipping
Billing
Order Done
Review Order
CONT
CONT
ORDER
CHECKOUT
Payment request made to PayPal.
PayPal Review
PayPal Login
CONTINUE
LOGIN
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Example PayPal Express Checkout

• In Express Checkout, PayPal as an Additional
  Payment Option can be placed before the shipping
  and billing address information is collected.
• The buyer uses the shipping address and financial
  info stored in PayPal and PayPal passes the
  shipping address to the merchant.

19
PayPal Express Checkout Flow
20
PayPal Standard Checkout Flow
HTML
HTML
21
PayPal Standard Checkout

• PayPal Standard Checkout is when PayPal is listed
  with other payment options.
• It can be with option buttons, sectioned off, or
  in a drop-down list.

22
Summary PayPal as an Additional Payment Option
-- Benefits to Your Merchants

• Increase Acquisition Drive Incremental Sales
• Offer a global and trusted payment solution
• Access PayPals growing user base worldwide
• Benefit from strong brand association initiatives
• Attract customers who do not have a credit card
  or are located internationally
• Increase incremental sales by offering PayPal as
  a way to pay
• Increase Conversion Rates
• Fast and Easy Payment Flow
• Address users security concerns
• Customers shop without sharing financial
  information
• Reduce costs of Service
• Reduce charge-backs
• Reduce fraud
• Reduce Customer Support requirements