Can Anyone Really Tell The Payments Impact On Revenue?

E-Commerce7

Although it’s all-but-universally accepted that the more customer-desired payments options a merchant offers the better, it’s often tricky to measure the revenue-specific results.

David Cost, VP of e-commerce for apparel site Rainbow Shops, found this out a few months ago when his site started accepting PayPal. Revenue increased at the same rate it historically has, but 20 percent of payments almost immediately started being fulfilled by PayPal.

The tricky question is: Would the shoppers who used PayPal have made those identical purchases anyway, using Visa/MasterCard? Or did the PayPal move save those sales and prevent the revenue from plunging?

Cost said that he isn’t sure. He found the switch had no appreciable impact on transaction fees (“interchange proved to essentially be a wash”) and did generate “a slight drop in fraud.” But the revenue ROI proved hard to establish.

“The tolerance for friction (among shoppers) is getting less every day,” Cost said, so it’s entirely possible that the move saved sales that a year or two ago wouldn’t have needed saving.

Cost will delve into that experience on a New York City panel on March 1 at the Electronic Transactions Association (ETA) 2016 Transact Tech NYC show. That panel will be moderated by PaymentsFacilitator.com Editor-in-Chief Evan Schuman.

Cost will be joined by Craig Abruzzo, general counsel for beauty products site Birchbox.com. Abruzzo is focused these days on privacy, insurance and the changing state regulatory environment. Other than “manage to California,” Abruzzo will share his other thoughts on what e-commerce needs to do to survive the inhospitable legal climate in 2016.

“Regulators are getting a lot more strict about how (retailers) use (their) data,” Abruzzo said. He’ll also focus on insurance coverage e-commerce challenges and the complication-laden world of indemnification.

If you’re near New York City on March 1, drop by. We promise a spirited debate.

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