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The payments landscape is evolving rapidly, with service providers introducing advanced features to solve common challenges, optimize transaction processes, and help improve ROI.
Beyond standard payment processing, providers like PayPal offer a suite of value-added services that are designed to optimize operational efficiency, improve authorization rates, and deliver a seamless customer experience. However, many merchants may not be aware of these resources.
In this guide, we’ll explore six common challenges in payment processing and demonstrate how value-added services can turn these pain points into opportunities for growth.
Managing fraud is a delicate balancing act. High levels of chargebacks and fraudulent transactions require manual intervention, straining resources while negatively impacting the customer experience. However, not addressing fraud effectively can pose significant risks to a business's reputation.
PayPal addresses these concerns with AI-driven fraud management tools designed to detect and prevent fraud in real time. By leveraging machine learning algorithms that adapt to evolving fraud trends, merchants can reduce false positives and minimize risks without compromising legitimate transactions.
Merchants integrating PayPal’s fraud protection tools have reported fewer chargebacks, with one company seeing a 15.5% reduction in chargebacks1. By proactively integrating PayPal’s fraud protection tools into your business’ payment system, it's possible to reduce chargebacks and create a secure, low-friction transaction process.
Global payouts to vendors, contractors, or affiliates can be complex, from cross-border compliance to time-consuming manual processes prone to errors. Managing these processes manually may strain resources and lead to mistakes.
PayPal’s automated global payout solutions streamline the process, delivering speed, accuracy, and compliance across regions and currencies. This solution has proven effective—in 2023 alone, PayPal processed over $7.1 billion in payouts for 16 insurance companies2, demonstrating its reliability and scale.
By automating large-scale payouts, merchants save valuable time and resources while maintaining compliance in global markets.
Cart abandonment continues to be a major pain point for businesses, with lengthy checkout processes and limited payment options being the principal causes3.
PayPal offers solutions, such as guest checkout, Buy Now Pay Later (BNPL) services, and tokenized payment data, all designed to streamline the process. For instance, Whisker experienced a 58% increase in average order value (AOV) using Pay in 4 and a 98% increase in AOV with Pay Monthly4.
These tools can enable businesses to reimagine checkout, accommodate customer preferences, reduce friction, and improve conversion rates. Additionally, PayPal’s Fastlane accelerated checkout has shown that shoppers convert 48% better than non-accelerated users, with many completing transactions in as little as two minutes5.
High decline rates and low approval rates result in lost sales and missed revenue opportunities for merchants. Identifying the root causes of these transaction failures is often challenging.
With analytics-driven payment optimization tools, PayPal offers businesses deep insights into transaction trends, helping merchants diagnose failures and improve approval rates. Avelo Airlines, for instance, achieved a 3% increase in approval rates through PayPal’s advanced analytics6.
By using data to optimize payment flows, businesses can reduce declines and improve lost revenue capture.
Managing multiple payment providers, currencies, and platforms can lead to inefficiencies and operational complexity.
PayPal’s payment orchestration platform simplifies these processes by unifying payment systems into a single solution. This seamless integration reduces complexity and allows businesses to manage transactions across various channels and currencies efficiently.
By consolidating payment systems with PayPal’s payment orchestration tools, merchants can enhance operational agility, enabling them to focus on growth rather than admin.
Scaling operations, especially during periods of growth or international expansion, can overwhelm existing payment systems. Seasonal transaction surges and entering new markets can pose additional challenges.
PayPal’s scalable solutions ensure reliable performance even during periods of high demand. In 2023, Pay Later processed over 199 million transactions, reflecting a 36% year-over-year increase in volume7. The platform’s robust infrastructure supports businesses as they grow, offering the flexibility to handle surges without compromising performance.
Value-added services are not just about solving immediate pain points—they play a significant role in achieving long-term business growth.
Here are the advantages of implementing these services in both the long and short term.
AI-powered fraud management tools evolve with changing fraud patterns, minimizing chargebacks while preserving customer trust. PayPal’s own fraud solutions continuously leverage intelligence across the PayPal network to adapt to the shifting fraud landscape, using data from more than $1.53 trillion in total annual payments to understand new threat signals8.
Automated global payout systems streamline payments to vendors, contractors, and partners while ensuring compliance with local regulations. For instance, PayPal's global payout solutions enable businesses to disburse funds to over 200 markets, offering more than 50 currencies, while ensuring compliance with local regulations through robust payout compliance controls.9
Offering a variety of payment options is key to attracting and retaining customers. From digital wallets to BNPL services, PayPal enables businesses to cater to global preferences. Whisker’s integration with Pay Later resulted in 25% of new customers opting for flexible payment options10, highlighting the impact of tailored payment experiences.
A faster checkout experience, achieved through guest checkout options, drives higher conversions. PayPal’s Fastlane autofill capability has shown that 67% of shoppers complete their checkout process, with many finishing in under two minutes11. Guest checkout is facilitated by tokenization and stored payment data, making the process fast and low friction.
Analytics provide actionable insights into transaction patterns, helping businesses reduce decline rates and maximize revenue. By leveraging data, merchants can refine their operations and deliver a seamless customer experience.
PayPal’s analytics-driven tools like payment optimization also benefit from access to intelligence from PayPal’s two-sided network, which connects more than 400 million active customer accounts globally12.
Unified payment systems reduce complexity, allowing businesses to operate more efficiently. By integrating multiple providers and currencies into one streamlined platform, merchants save time and resources.
Choosing the right payments provider is about more than just transactions—it’s about enabling growth, improving efficiency, and delivering exceptional customer experiences. With PayPal’s value-added solutions, merchants gain access to a comprehensive suite of tools designed to solve challenges and unlock new opportunities.
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