PayPal is not my favorite processor – Stripe is. However, that doesn’t mean that excluding PayPal from your eCommerce site’s payment methods is the best choice for you.
While PayPal may not always be the most merchant friendly payment processor available (read this from Chris Lema for an idea), customers trust PayPal and many merchants see an increase in their bottom line by using PayPal on their site. Nielsen Online Buyer Insights reports that PayPal Merchants benefit from a 27% increase in total customers after integrating PayPal, while total amount spent by customers increases 15% and transactions per customer almost double.
That kind of trust and those increases are significant enough that you should be testing PayPal in your store’s checkout to see if you can duplicate these results yourself. Customers don’t even need a PayPal account to pay via PayPal – they can use their bank account or credit card to complete checkout, but can use their PayPal balance with an account.
While PayPal Pro requires an SSL certificate while other methods may not, I’m not going to include this in our comparison. If you run an eCommerce site, you should be using an SSL certificate no matter what. Aside from protecting payment information, they protect the login information for you and your customers from being sent in plain text to your server, and they usually increase conversions due to increased trust. You’ll also get an SEO bump for having one.
Our PayPal comparison is meant to help you decide which PayPal service is right for your WordPress eCommerce store. We’ll describe what each PayPal service can do and the associated fees (in USD), then we have a list of which PayPal add-ons are available for each eCommerce plugin so you can get started!
PayPal Standard is one of the most popular gateways for merchants, as there are no setup fees, termination fees, or merchant accounts needed to get set up – all you need is a PayPal Business account. PayPal Standard is available in 190 countries, so almost any merchant can use it.
Transactions via PayPal Standard are processed on PayPal’s site (not your own), and will allow customers to pay with a PayPal balance or credit card. They’ll be sent to PayPal from your checkout screen, and you’ll be charged the standard transaction fee for these payments, which is 2.9% + 30¢ per transaction. Customers are then directed back to your site after completing the PayPal checkout. PayPal also offers volume discounts if you process over $3000 in transactions with PayPal monthly.
Since checkout is completed on PayPal’s site, you have to rely on PayPal send payment success and failure notifications back to your store for completed orders using something called an Instant Payment Notification (IPN). Using the PayPal IPN can occasionally be unreliable, which can sometimes result in the orders not being completed correctly on your store, which is one of the downsides to PayPal Standard.
PayPal Express is available in the same countries as PayPal Standard, and you’ll be charged the same 2.9% + 30¢ per transaction with no setup or termination fees. PayPal Express is very similar to PayPal Standard with one major difference: the checkout flow.
PayPal Express avoids the IPN issues that arise with PayPal Standard. Customers will be directed to PayPal from your site, but they don’t complete checkout at PayPal. Instead, customers approve a purchase at PayPal, then they’re directed back to your site with a token (this token is passed to your site behind-the-scenes).
The token can be used by your site to submit a final payment to PayPal. When a customer clicks to finish placing the order on your site after being directed back, this finalizes the order and sends that token back to PayPal with the final order details.
This is a more reliable payment method than PayPal Standard, as the checkout is completed on your site, but the payment is done on PayPal’s servers once your token is returned to PayPal.
There are no startup or termination fees with PayPal Pro, but there is a $30 monthly fee along with a per-transaction fee of 2.9% + 30¢ (volume discounts are still available). PayPal Pro also includes the PayPal Virtual Terminal to allow you to accept payments over the phone, the ability to accept bank transfers and in-person payment, as well as online invoicing.
The biggest difference (and benefit!) to using PayPal Pro is that you can customize the entire checkout experience, as customers remain on your site during the checkout process rather than being directed to PayPal to complete checkout or approve payments.
PayPal Pro is available to merchants in the UK, US, and Canada. PayPal also has a comparison available between PayPal Standard and PayPal Pro.
PayPal Advanced is available for merchants in the US and Canada only this time. Advanced includes online payments and invoicing for merchants along with a checkout directly on your site like PayPal Pro.
There are no setup or termination fees, but PayPal Advanced requires a $5 monthly fee along with fees of 2.9% + 30¢ per transaction. The difference between PayPal Advanced and PayPal Pro is that the checkout form is on your site and embedded in your checkout process, but is not something that you can customize entirely.
The PayPal Advanced checkout form is an iframed form, which means that the form is actually hosted on PayPal’s servers and embedded on your checkout page. From the customers point of view, they remain on your site and in your checkout flow for purchasing, but the payment form is actually hosted by PayPal and payment information is sent directly to their servers.
One of the less popular gateway options offered by PayPal is the Digital Goods gateway. This gateway can only be used for digital goods, but offers a really awesome benefit: customers can check out with two-clicks using PayPal Digital Goods.
This gateway can be embedded in an app, game, website, or other digital content to offer a quick, high-converting checkout. The checkout process is seamless and can be completed from within your digital content easily, as shipping information is not needed.
PayPal Digital Goods charges only per-transaction fees of 2.9% + 30¢ or 5.0% + 0.5¢ (whichever is lower) to better support micropayments (payments usually lower than $10-12). This can be really handy if you sell music or other goods on your website that will either be all-digital or priced at less than $10 so that you can get the lowest fees possible.
The WooCommerce PayPal comparison has a list of accepted countries for Digital Goods, including the US, Canada, Australia, New Zealand, China, the UK, and others, and PayPal has an FAQ available for the Digital Goods gateway.
So which platforms have PayPal add-ons available? Here’s our chart that provides details on which WordPress eCommerce plugins support which PayPal services. All eCommerce plugins include PayPal Standard in the core plugin.
1 Part of the same plugin purchase
2 Part of PayPal Pro
3 2-site license
4 Part of the same plugin purchase
WP eStore says their core plugin uses PayPal Express, but it seems far more like the PayPal Standard implementation while digging through the code, so I’m not 100% sure on that one.
WooCommerce also has a comparison available for WooCommerce PayPal integrations.
PayPal offers a solution that fit into almost any eCommerce store, and should at least be tested in your checkout flow to assess conversion rates and support your customers’ preferred payment method. The trust and popularity that PayPal has built as one of the first reliable eCommerce payment processors makes it a valuable offering in your eCommerce store, and the WordPress eCommerce add-ons available make setup and integration easy.