QUICK CASE STUDIES
MyStoreRewards and StubHub are two examples of applications that leverage the PayPal platform in creative ways. Since PayPal’s platform allows for both the sending and receiving of money (including many administrative capabilities), these two companies were able to build business models that have led them both to great
success. Perhaps reading about their strategies might spark some creative insights for your own website.
MyStoreRewards
MyStoreRewards offers a simple way for merchants to set up a rewards program on their website that will encourage repeat business in buyers by sending them cash back on purchases made with PayPal. For a small monthly fee, MyStoreRewards will give you a little snippet of HTML to place on your website that allows your buyers to sign up for your rewards program. Buyers then have incentive to return to your website in the future, because they will save money on repeat sales. MyStoreRewards handles the program
registration and payouts, and allows merchants to customize several aspects of their rewards program, including the percentage of cash back they wish to award to buyers. Create your own rewards program today at www.mystorerewards.com. StubHub
StubHub is an online marketplace where people can buy and sell tickets to concerts, sports games, and other events. By using PayPal’s API, StubHub automates the payout of tickets sold by sellers, so that they can be instantly credited once the sale has been made. StubHub adds additional value by guaranteeing delivery of the tickets to buyers in time for the event, and even offers a few “last-minute ticket” physical pickup locations around the country. Powered by a passionate community of users, StubHub quickly rose to become the premier place to buy and sell tickets online. eBay thought highly enough of the StubHub marketplace to acquire the company for $310 million in January 2007. For more information (or to search for some concert tickets), check out www.stubhub.com.
The days of relying solely on advertising revenue are behind us as well. Unless they attract huge volumes of focused traffic, companies that want to win in today’s attention economy have to go beyond just attracting eyeballs—they must provide value to end users in the form of saving them time or money, or by providing a service that they cannot get elsewhere. Simplicity and convenience will also continue to play a crucial role in reaching broad adoption and rapid growth. Fortunately, PayPal offers both in spades.
When developers and entrepreneurs together have a broader understanding of PayPal’s full capabilities, including its strengths as well as its limitations, we will see an exciting evolution of the types of applications and websites released with PayPal functionality built in. As long as PayPal stays true to remaining convenient and secure for the consumer, there will be a viable payments solution to serve that evolution for years to come.
MyStoreRewards and StubHub are two examples of applications that leverage the PayPal platform in creative ways. Since PayPal’s platform allows for both the sending and receiving of money (including many administrative capabilities), these two companies were able to build business models that have led them both to great
success. Perhaps reading about their strategies might spark some creative insights for your own website.
MyStoreRewards
MyStoreRewards offers a simple way for merchants to set up a rewards program on their website that will encourage repeat business in buyers by sending them cash back on purchases made with PayPal. For a small monthly fee, MyStoreRewards will give you a little snippet of HTML to place on your website that allows your buyers to sign up for your rewards program. Buyers then have incentive to return to your website in the future, because they will save money on repeat sales. MyStoreRewards handles the program
registration and payouts, and allows merchants to customize several aspects of their rewards program, including the percentage of cash back they wish to award to buyers. Create your own rewards program today at www.mystorerewards.com. StubHub
StubHub is an online marketplace where people can buy and sell tickets to concerts, sports games, and other events. By using PayPal’s API, StubHub automates the payout of tickets sold by sellers, so that they can be instantly credited once the sale has been made. StubHub adds additional value by guaranteeing delivery of the tickets to buyers in time for the event, and even offers a few “last-minute ticket” physical pickup locations around the country. Powered by a passionate community of users, StubHub quickly rose to become the premier place to buy and sell tickets online. eBay thought highly enough of the StubHub marketplace to acquire the company for $310 million in January 2007. For more information (or to search for some concert tickets), check out www.stubhub.com.
The days of relying solely on advertising revenue are behind us as well. Unless they attract huge volumes of focused traffic, companies that want to win in today’s attention economy have to go beyond just attracting eyeballs—they must provide value to end users in the form of saving them time or money, or by providing a service that they cannot get elsewhere. Simplicity and convenience will also continue to play a crucial role in reaching broad adoption and rapid growth. Fortunately, PayPal offers both in spades.
When developers and entrepreneurs together have a broader understanding of PayPal’s full capabilities, including its strengths as well as its limitations, we will see an exciting evolution of the types of applications and websites released with PayPal functionality built in. As long as PayPal stays true to remaining convenient and secure for the consumer, there will be a viable payments solution to serve that evolution for years to come.
PayPal and eBay
Many people’s first encounter with PayPal comes via eBay, and it’s widely known that the eBay marketplace provided fuel for the rapid growth of both PayPal accounts and payment volume. Upwards of 80% of U.S. eBay listings prefer PayPal as the payment method, and in most countries over half of PayPal payment volume is from eBay transactions. When PayPal enters a new country, it often leverages the headway that eBay has made there to rapidly register new accounts and grow in popularity. eBay and PayPal will forever be tightly coupled, and with good reason.
PayPal was acquired by eBay in October 2002. This was after eBay attempted to launch its own competing payments service called BillPoint. BillPoint ultimately was not well received by the eBay community, which much preferred to use PayPal. BillPoint soon fizzled out completely, joining the dozens of other services that have attempted to play in the online payments game and have since been left in PayPal’s dust.
This section is the last time eBay will be mentioned in this article. There are dozens of other books available that can show you how to use eBay and PayPal together—that’s just not what this article is about. My focus is on PayPal’s merchant services solutions and how web developers can make sense of them. In other words, this article covers solutions for all of the off-eBay businesses that are turning to PayPal to meet the payment needs of their businesses.
Choosing the Right Solution
With all the features that PayPal offers, how do you know which is the right solution for you and your business? It’s not always obvious, and in fact there is usually more than one way to meet your requirements. Some issues you should take into consideration are the complexity level you’re willing to take on, whether you want the customer to pay on your website or PayPal’s, and how much of a fee you are willing to pay.
Business owners have a lot on their minds, and they often rely on developers as knowledgeable experts in the area of online payment processing solutions. In a recent PayPal survey, 89% of developers polled responded that they were either the sole decision maker or highly influential in the process of selecting a payments provider. What does that mean for you if you’re a developer? Essentially, you’re often counted on for more than just your coding expertise.The more you know about the various PayPal payment options available to you, the better you will be able to serve your client or employer in recommending and implementing the right solution.
This section addresses the high-level options and presents some considerations you should be aware of before making your final selections.
With all the features that PayPal offers, how do you know which is the right solution for you and your business? It’s not always obvious, and in fact there is usually more than one way to meet your requirements. Some issues you should take into consideration are the complexity level you’re willing to take on, whether you want the customer to pay on your website or PayPal’s, and how much of a fee you are willing to pay.
Business owners have a lot on their minds, and they often rely on developers as knowledgeable experts in the area of online payment processing solutions. In a recent PayPal survey, 89% of developers polled responded that they were either the sole decision maker or highly influential in the process of selecting a payments provider. What does that mean for you if you’re a developer? Essentially, you’re often counted on for more than just your coding expertise.The more you know about the various PayPal payment options available to you, the better you will be able to serve your client or employer in recommending and implementing the right solution.
This section addresses the high-level options and presents some considerations you should be aware of before making your final selections.
Website Payments Standard
Website Payments Standard is the simplest of PayPal’s solutions. Through the use of some basic HTML code, you can set up Buy Now payment buttons, donation buttons, recurring subscriptions, and even a simple shopping cart. If you’re on a shoestring budget for a small business, then Website Payments Standard is the way to go. When a payment button is clicked by a buyer, your code directs the user to PayPal with an HTTP form post that contains the transaction details PayPal needs to complete the purchase. The buyer logs in at PayPal, approves the transaction, and voila!—money is moved. The user is then returned to a URL you specify in the button parameters (or the PayPal homepage if no URL is specified). For more information on Website Payments Standard, see my next article.
Instant Payment Notification
If you want to step it up a notch, Instant Payment Notification (IPN) is useful if you know how to write code that creates HTTP requests and parses HTTP responses. With IPN, PayPal sends an HTTP post to a URL you specify every time a new transaction occurs or the status of a previous transaction is updated. This allows you to automatically update a database with the transaction details, send a customized order confirmation email message to the buyer, or perform other similar automated processes. The notification usually happens within a split second of the transaction completing, but on rare occasions IPN messages can be delayed for up to a few minutes. For more information on IPN, see my next article.
If you want to step it up a notch, Instant Payment Notification (IPN) is useful if you know how to write code that creates HTTP requests and parses HTTP responses. With IPN, PayPal sends an HTTP post to a URL you specify every time a new transaction occurs or the status of a previous transaction is updated. This allows you to automatically update a database with the transaction details, send a customized order confirmation email message to the buyer, or perform other similar automated processes. The notification usually happens within a split second of the transaction completing, but on rare occasions IPN messages can be delayed for up to a few minutes. For more information on IPN, see my next article.
Payment Data Transfer
When customers check out with their PayPal account, they can return to the seller’s website when the transaction is completed (the exception to this is Express Checkout, as explained shortly). Payment Data Transfer (PDT) gives you the ability, through a series of secure HTTP posts, to immediately retrieve details about the transaction from PayPal so that you can display them to the customer when he or she returns to your website. It is a fairly simple feature that offers an incrementally improved user experience that can add that extra bit of professionalism to the finished product. For more information on PDT, see my next article.
When customers check out with their PayPal account, they can return to the seller’s website when the transaction is completed (the exception to this is Express Checkout, as explained shortly). Payment Data Transfer (PDT) gives you the ability, through a series of secure HTTP posts, to immediately retrieve details about the transaction from PayPal so that you can display them to the customer when he or she returns to your website. It is a fairly simple feature that offers an incrementally improved user experience that can add that extra bit of professionalism to the finished product. For more information on PDT, see my next article.
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