PayPal adds Apple Pay support for small merchants using Advanced Checkout

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PayPal is adding new tools for small business owners, including Apple Pay support at checkout, the ability for customers to save their cards for this specific site, and access to IC++ pricing.

Small and medium-sized businesses currently have two ways to integrate PayPal into the checkout process. In addition to the Standard Checkout integration that lets you accept PayPal payments with little effort, the company also has an Advanced Checkout integration feature for businesses that want more personalizations and payment features. Businesses that chose the latter option can now accept Apple Pay payments from their customers. The checkout tool already offers customers several options: they can make payments via PayPal, Venmo and PayPal Pay Later, as well as credit cards.

Last year, PayPal and Venmo announced support for Apple’s tap-to-pay-on-iPhone solution. It marked the beginning of a new business relationship between Apple and the payments company.

PayPal also adds a tool to the checkout product. Customers can choose to store their cards in a secure vault for that specific e-commerce business – the card is not stored in a PayPal account as customers do not need a PayPal account for card payments. So if users often shop at that company, they don’t have to key in their card details every time. The payment company also has support for account updater and network token service, which automatically updates details when lost or stolen cards are reissued on file.

Nitin Prabhu, the company’s VP of merchant experiences and payment solutions, told AapkaDost over the phone that with Advanced Checkout, the company doesn’t share purchase information with other competitors. But he said the data they collect from a merchant site can be used to offer their products, including PayPal Pay Later. He also noted that PayPal uses the data to mitigate risk and fraud.

The fintech is also introducing the IC++ pricing model for companies. Until now, PayPal offered a flat fee model for advanced checkout. But Prabhu said that for medium-sized companies earning several million a year, IC++ could offer a good alternative. The IC++ structure consists of interchange fees (charged by the issuing bank), card network fees (charged by a network such as Visa and Mastercard), and formatting fees collected by PayPal. This method allows merchants to see if they can incentivize customers to use cards from a specific bank or network.

PayPal faces competition from Amazon, which launched the Buy with Prime product with checkout and shipping in January. In a recent message to customers, asset management/research firm Bernstein said that companies are offering services beyond the checkout button, which has historically been PayPal’s main strength.

“For other payment buttons, such as PayPal, the pitch of payment buttons has been increasing double-digit sales conversion for years. Today, just the checkout button is becoming more and more commonplace as nearly a dozen options now exist and guest checkout (the real point of friction for consumers) is shrinking. While Buy With Prime may not be a big deal on its own in the context of overall e-commerce (which is bigger than eRetail), we’re concerned about the risk of stock loss from a thousand cuts for PayPal. As a reminder, the core button remains the profit engine for PayPal, and within that business, SMBs are PayPal’s bread and butter (with very attractive economies),” the note read.

PayPal has also tried to be a payment option for various e-commerce purchases. Last year, it partnered with Amazon to offer customers Venmo as a payment option.

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