PayPal Overview

With all the emerging technology in mobile banking and mobile commerce, many entrepreneurs, small- to medium-sized businesses, and consumers continue to use PayPal to receive and send money online. Brick and mortar stores such as Dollar General offer PayPal to customers as a payment option at checkout.

What is so special about PayPal? It is available to both consumers and businesses. PayPal allows consumers to create a free account and then add a credit card or checking account to their account that can be used when making purchases or sending or receiving money online by logging into their account on any device or through the PayPal app. With the increased number of data breaches of consumer information, this is one step that many consumers take to protect their credit card information. Although nothing is 100 percent secure, it is a small step in the right direction. In other words, doing something is better than doing nothing. PayPal and other payment gateways such as Stripe must adhere to a set of security standards to protect consumers’ payment information. These standards are implemented by the Payment Card Industry Data Security Standards (PCI DSS) known as PCI Compliance. Even using PayPal, businesses still need to know and understand what it means to be PCI Compliant. To become more familiar with PCI compliance, visit www.pcicomplianceguide.org .

Founded in December 1998 as Confinity and acquired by eBay in 2002, PayPal has become one of the online payment method leaders. How big of an industry leader are they? According to a 2014 Techworld.com article, as many as four billion payments were processed through PayPal’s e-commerce system.³ Why is this? PayPal has brand recognition among consumers, which also establishes credibility for those businesses who offer PayPal as a payment method. It is also a trusted e-commerce brand that most business and consumers have used to sell or purchase items online, send money, or send electronic invoices for products or services. Whether as a buyer or seller, PayPal provides convenience to send and receive money online and from any mobile device as well as from the app. Chapter 7 will discuss more about PayPal’s and other payment gateway’s roles in a business-to-consumer (B2C) or business-to-business (B2B) transaction when creating an online store.

Compared to some of its competitors, PayPal offers an all-in-one solution with no setup fee, monthly fee (depending on plan), or termination fee along with credit card processing fees for businesses based on total sales volume. With PayPal, micropayments (transactions of $10 or less) are charged higher percentages (varies between U.S. and International) plus a fixed fee. No merchant account or payment gateway is needed. PayPal handles everything. However, there are charges for other online merchant services such as chargebacks, refunds, and others that are listed on PayPal’s website. Entrepreneurs and small businesses can benefit from PayPal’s services and quickly accept credit cards as opposed to securing an Internet merchant account through a banking institution, which can be time consuming and expensive. However, PayPal is not the only payment gateway that can be used, but it is trusted by many consumers.

What is an Internet merchant account? First, let’s define a merchant account. A merchant account is a bank account where money is first deposited when a consumer makes an online purchase before being deposited into a business’s bank account. An Internet merchant account is “a merchant account specifically designed to hold the proceeds from the online payment processing of credit cards.”⁴ In a brick and mortar business, a merchant account would be needed for each accepted credit card type. This is not the case for online stores. One notable difference between a merchant and Internet merchant account is the fees. Fees are typically higher with Internet merchant accounts due to the perceived risk involved with dealing with businesses that process small sales volumes. If PayPal is not used, a payment gateway would be required to authenticate and authorize or decline the online credit card transactions, which can be expensive. To compare online payment gateway prices, visit www.formstack.com/payment-gateway-comparison .

When most entrepreneurs or brick and mortar small businesses want to sell products or services online from their website, they typically start with PayPal because it is inexpensive, quick, and easy to add PayPal’s “Buy Now” buttons to their website. Adding PayPal’s “Buy Now” buttons on a website works well to sell a few items when inventory is limited or when consumers are only interested in purchasing one item during a visit. However, as more inventory items are added or changed, “Buy Now” buttons might need to be replaced with a more scalable solution such as a shopping cart. A virtual shopping cart is like a physical grocery cart in which customers fill their cart with multiple items before heading to checkout. PayPal does offer a shopping cart solution where “Buy Now” buttons would be replaced with “Add To Cart” buttons.

Googling the phrase “e-commerce solutions” returns over eight million results, which again makes it difficult to quickly narrow down and select the right one for a business’s needs. Popular e-commerce solutions such as Shopify with over 600,000 business shops make it simple to sell products online and on social media sites such as Facebook. Another option is Facebook Shops. Facebook Shops allows businesses to set up online stores to sell products and services to potential Facebook customers. With all these and other options available, it is important to realize that there is no perfect e-commerce solution. The solution that you choose should focus on a positive return on investment (ROI) ), low total cost of ownership, easy setup and use, and scalability as your business and needs grow. Since there are so many options available, why choose WooCommerce?

What Is WooCommerce?

Although many might not be as familiar with WooCommerce as some of the other popular e-commerce solutions such as PayPal or Shopify, it is still just as popular. WooCommerce is an open source e-commerce platform used with WordPress self-hosted websites to create online stores (Figure 4-1). It is a comprehensive, do-it-yourself e-commerce solution that is installed as a WordPress plugin. Once installed, it is available from within the WordPress Dashboard, which makes it straightforward to manage and update. It uses the simple but professional looking Storefront theme to create an online store’s appearance and layout. Recall from Chapter 3 that themes are the outward appearance of a website that visitors see. The Storefront theme is the default WooCommerce online store theme. However, it can be customized through its Storefront Extensions Bundle that at the time of this writing costs $69. Likewise, WooCommerce Storefront Child themes are available for purchase from the WooCommerce website.

According to Builtwith.com, there were over two million WooCommerce websites online, and most of those are business related at the time of this writing.⁵ Other business categories that use WooCommerce include shopping, entertainment, health, technology, social, and education. Compared to its Shopify competitor which has 0.2 percent of the e-commerce platform market share, WooCommerce accounts for 0.6 percent with most of the businesses residing in the United States and the United Kingdom. At the time of this writing, WooCommerce has been downloaded over 43 million times and continues to increase daily.⁶

WooCommerce Features

Entrepreneurs and organizations have many choices to choose from when it comes to e-commerce solutions, but what makes WooCommerce different? What features does it offer to potential store owners considering using it over its competitors?

Once downloaded and installed, WooCommerce provides online store owners with many core features for free that can be used to quickly and efficiently set up and launch their initial online store. What are some of these features? Let’s look at some of these.

Other WooCommerce Products

For those businesses looking for an e-commerce solution, WooCommerce is an excellent choice with many benefits and features to quickly set up an online store.

Installing WooCommerce

Before installing WooCommerce, adding inventory, and launching a store to the Web, certain steps should be followed. For starters, securing a domain name for an online store is crucial for several reasons. First, potential customers will use this to locate an online store. Even if they do not know a company’s website address, they can still use search engines such as Google to find it. When choosing a domain name, keep it short and easy for potential customers to remember. It might be tempting to create a long, descriptive URL, but if no one can remember it or how to spell it, it is useless. Having a memorable domain name also ties into a company’s brand.

Once a domain name has been chosen, where should it be registered? Some people prefer to register their domain separately and use companies such as www.namecheap.com , www.godaddy.com , www.networksolutions.com , and others to do it. Most web hosting companies will also register a new domain name or transfer an existing domain name during the web hosting sign-up process. If you are uncertain about who to select for web hosting, it is recommended to consider using managed WordPress hosting. Managed WordPress hosting is hosting that handles all aspects of running and maintaining WordPress. Unlike shared hosting, it can be more expensive, but it provides faster performance because it is optimized for WordPress websites. A few popular managed WordPress hosts include WPEngine.com, Siteground.com, Bluehost.​com, and FlyWheel.⁹ Many managed hosts offer WooCommerce and WooCommerce plans. Likewise, www.woocommerce.com also recommends hosting solutions under the We Recommend Section at the bottom of their homepage.

Once web hosting is obtained, it is now time to install WooCommerce. WooCommerce can be installed by either FTP or directly through a web host’s cPanel. Let’s look at installing WooCommerce via FTP.

Installing WooCommerce via FTP

The WooCommerce plugin can be downloaded from the WordPress.org Plugins directory. After search for WooCommerce on the Plugins page, the WooCommerce plugin page is displayed with its information along with a download button (Figure 4-2).

To FTP the WooCommerce plugin to a web server, click the download button and save the zip file to a location on the computer (Figure 4-3). Once downloaded, the file can either be unzipped or not. The zipped file can be uploaded to the Plugins menu via the WordPress Dashboard (Figure 4-4). It can also be unzipped and installed via an FTP program. An FTP program allows a file stored on one computer to be transferred to another computer’s location via an Internet FTP connection. Web hosts provide an FTP URL, FTP username, and password for a domain once hosting has been purchased. This information is used to connect to the web server. Using an FTP program or the web host’s control panel, upload the folder to the WordPress installation wp-content/plugins directory (Figure 4-5). The plugin can now be activated from the Plugins menu in the WordPress Dashboard (Figure 4-4).

WooCommerce can also be installed through the WordPress Dashboard. Once logged into your web host’s WordPress Dashboard with your credentials, locate the Plugins menu and click Add New (Figure 4-6).

In the search plugins box, type in WooCommerce and hit enter. Once the WooCommerce plugin is returned, click the Install Now button (Figure 4-7).

Once the WooCommerce installation is complete, an activate button will appear. The activate button will launch a setup wizard to continue configuring your store’s initial settings (Figure 4-8). Before setting up your online store, let’s look at e-commerce themes and their roles in WooCommerce. Chapter 5 will address e-commerce themes.

To get started, visit www.woocommerce.com and click the Get Started button on the homepage (Figure 4-1). To create a WooCommerce account to manage purchases, support tickets, and subscriptions, WooCommerce requires either an existing WordPress.com account, create a new WordPress.com account, or continue with Google (Figure 4-9). Recall from Chapter 3 that wordpress.com is a hosted account.

Summary

WooCommerce offers many features that can help small- and medium-sized businesses create a scalable online store for physical or digital products. With its intuitive installation via FTP or within the WordPress Dashboard, WooCommerce can be quickly installed. In the next chapter, WooCommerce’s configuration settings for creating an online store will be explored.