High Shipping Costs Top the List; PayPal Introduces New Feature to Help Merchants Show Total Cost of Purchases Early on in Checkout Process

SAN JOSE, Calif. - June 23, 2009 - A PayPal survey released today revealed that nearly half (45 percent) of online shoppers have abandoned their carts multiple times in the past three weeks due to high shipping costs, security concerns and lack of convenience. The average cost of abandoned goods in U.S. shopping carts is $109.

High shipping costs was cited as the largest single reason for cart abandonment. While nothing could have prevented one-third of shoppers from abandoning purchases, the survey found that providing shipping costs upfront might have caused 40 percent to complete the purchase. To help merchants encourage shoppers to purchase, PayPal today announced a new Express Checkout feature - the PayPal Instant Update API. By integrating the new API, merchants can show order details earlier in the process including shipping options, insurance choices and tax totals.

“To get shoppers to buy, it’s critical merchants make the checkout experience easy and costs transparent,” said Eddie Davis, senior director of SMB merchant services, PayPal. “Our new PayPal Instant Update API will help merchants get customers the information they need upfront to drive sales.”

The survey also uncovered signs that the economy still has shoppers wary about clicking the “purchase” button. More than one-third of respondents abandoned checkout because they didn’t plan for all of the expenses; while more than 25 percent left the site to search for a coupon. However, one-third of shoppers later returned to the same site to buy. An additional 20 percent purchased the items at a brick and mortar store or competitor’s Web site.

“Merchants who don’t welcome back abandoners with open arms are leaving hundreds of dollars per shopper on the table,” added Davis. “Merchants need to remember the items that customers abandon and make it easy for them to buy when they return. Sweetening the deal with free shipping, coupons and special discounts is also a great way to encourage online shoppers to complete their purchases.”

Breakdown on Why Shoppers Abandon

At least a fifth of all U.S. survey respondents cited the following as very important reasons for cart abandonment:

• High shipping charges: 46 percent
• Wanted to comparison shop: 37 percent
• Lack of money: 36 percent
• Wanted to look for a coupon: 27 percent
• Wanted to shop offline: 26 percent
• Couldn’t find preferred pay option: 24 percent
• Item was unavailable at checkout: 23 percent
• Couldn’t find customer support: 22 percent
• Concerned about security of credit card data: 21 percent

About the survey
The PayPal Checkout Abandonment Study was conducted by comScore among active shoppers who had recently abandoned a shopping cart. In the United States 553 people participated between May 12-15, 2009. All respondents were asked about their most recent abandoned session, regardless of the site involved.

About PayPal PayPal is the faster, safer way to pay and get paid online. The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing. With more than 73 million active accounts in 190 markets and 19 currencies around the world, PayPal enables global ecommerce. PayPal is an eBay company and is made up of three leading online payment services: the PayPal global payments platform, the Payflow Gateway, and Bill Me Later. More information about the company can be found at https://www.paypal.com.

Media Contacts:

Anuj Nayar
PayPal
anayar@paypal.com
408-967-5730

Lindsay Scalisi
Access Communications for PayPal
lscalisi@accesspr.com
415-844-6217

It’s hard to know who you can trust on the Internet. Is that really my bank’s website I’m viewing through my browser? Is there a real business behind that site with the rock-bottom prices? How do I know I’m looking at the right website? Internet Explorer 8 supports the new Extended Validation SSL (Secure Socket Layer) certificates to help users better answer these questions and see identity information for websites.

In the past, website security focused on protecting information in transit—helping to keep information safe from prying eyes. While it protected your information from being accessed by 3rd parties, the solution didn’t give you any information about the owner of the website. Looking for that gold padlock icon is important, but without the identity information you might end up sending your personal information to the wrong website.

Extended Validation (EV) SSL certificates are the result of an industry-wide effort to help increase identity awareness and provide consumers with a higher level of trust while online. These new certificates require businesses to complete a thorough documentation process and verify current business licensing and incorporation paperwork, in addition to verifying that the entity named in the EV certificate has authorized the issuance of the EV certificate. Internet Explorer 7 and 8 recognizes EV certificates for businesses that have completed this process, and visually represents them by coloring the Address Bar in green (see figure 1).

In addition to changing the Address Bar shading, EV certificates display details about the business, such as location for incorporation and country. Figure 2 provides an example showing the web site (PayPal, Inc) and the country (US).

If you were a customer of Woodgrove Bank, seeing the green Address Bar and the owner and country information would help you verify the identity of the website to determine it really is your bank. Just like current website security solutions in the past, your information remains protected from outsiders. Now you have the added benefit of being able to identify the website and make sure it’s the one you want before you conduct your personal business.

If you have more questions about the new Internet Explorer 8 Security Status Bar and how to use it in making trust decisions, please visit our Security Status Bar page. If you have more questions about Extended Validation Certificates, view these Frequently Asked Questions.