Shopping on your smartphone has never been more convenient. With just your thumb and a few taps and swipes, you can find just the item you need and add it to your cart.

Then comes the checkout process and the ultimate buzzkill to your in-the-moment shopping spree: you have to pull out your credit card and start thumbing in your payment and shipping info.

Or you can use PayPal. Shoppers who select PayPal typically just have to login to their PayPal account and voila. They need not enter payment information, and their shipping and billing details are pre-populated.

At Moovweb, we conducted research on a subset of the over 250 mobile experiences we power to understand: does the ease of using PayPal translate to higher conversion rates?

Our analysis, comprising 2 million page views from over 750,000 smartphone shoppers, revealed a surprising result: mobile users who select PayPal as a payment option have a 14% lower conversion rate than users who choose to pay by credit card.

PayPal conversion 14% lower than credit card conversion


Launched in 1998, PayPal is the most popular mobile payments service among U.S. consumers today, according to the latest Federal Reserve Board survey.

Over eight times as many consumers use PayPal as Apple Pay. And nearly five times as many use PayPal as Google Wallet.

PayPal’s popularity is reflected in its prevalence on retail sites. In fact, 72% of the 100 largest online retailers in the U.S. offer PayPal as a payment option at checkout, according to our research.


PayPal presence among top 100 retail sites


Retailers and consumers turn to PayPal because it’s both a secure way to make a payment and easy to use.

It is, in theory, far more convenient than whipping out your credit card and keying in your payment info.

Why then are mobile consumers that opt for payment via PayPal 1.3 times as likely to abandon the checkout process before completing their order?

Our in-house expert, senior analyst Kendra Cook, shared her insights on the factors that might drive lower conversions via PayPal:

  • PayPal adds another step to the checkout process: Shoppers must exit the site of purchase, load the PayPal site, then return to the site of purchase. These additional steps can be even more time-consuming than entering credit card information.

  • Checkout via PayPal is less likely to be thoroughly tested: In our research, we found only 20% of mobile shoppers opt to pay with PayPal over payment via credit card. When testing checkout, companies are more likely to focus on the more common credit card checkout and spend less time verifying the PayPal flow. Thus, bugs and UX issues are more common for PayPal checkouts, as compared to credit card transactions.
    mobile consumer payment preferences

  • PayPal requires a login: Anyone who is not automatically logged in to PayPal is at risk of forgetting her password or mistyping login information. This creates new exit opportunities and a greater chance of checkout abandonment.

  • PayPal errors may not show up until the user returns to the site of purchase: Depending on the site’s backend, PayPal errors (outdated card, etc.) may not show up until the user returns to the site of purchase, and in some cases, not until the order has been submitted. This means that the user might go through the entire flow before being alerted about an issue with the payment. And they would need to go back to PayPal to make edits.

  • Order submission is unclear: Often, the user does not know if continuing from PayPal will submit the order or bring them back to the site for order review. Users may be hesitant to continue on PayPal without reviewing their order. One technique we’ve seen retailers use effectively is adding text on the checkout page, indicating customers will have a chance to review their orders before completing their transactions on the retailer’s site.
    PayPal order review text at checkout


If PayPal has 14% lower conversions compared to credit cards, does it still make sense for retailers to offer the PayPal option?

Already 1 in 5 mobile users select the PayPal option, and that number is only expected to increase as consumers become more comfortable with mobile payment services.

And as Ms. Cook, our senior analyst noted, “Just because PayPal is associated with a lower conversion rate, this does not mean that the same users would be more likely to order with a credit card.”

In fact, “It’s likely that many users who abandon the PayPal checkout would have abandoned much earlier if the option was not available.”

The bottom line: PayPal is a handy, secure payment tool for mobile shoppers, but like all aspects of the checkout process, retailers must ensure it’s fully optimized and thoroughly tested.


Looking to optimize your mobile checkout process and boost your conversions?  Contact us to learn more.


by Anis Salvesen