3 Basic Tips on PayPal Payment Integration

In recent years you can see the rise of online shopping and the e-commerce sphere. So, the demand for payment gateways integrated into websites and mobile apps has substantially increased promoting PayPal payment integration as a cogent industry leader. As this system gateway supports accepting credit card transactions from clients, choosing an appropriate digital wallet system appears among top priorities promising successful business running.

In today’s article, OpenGeeksLab will dwell on the peculiarities of PayPal gateway integration and give efficient tips on how to implement PayPal in a website or mobile app with ease.

What is PayPal?

PayPal is an online payment system and its story starts in 1998 under the Confinity name. It was founded as a software development service for mobile security. But in 1999 the company changed direction to money transfers. And year after, in 2000, Confinity merged with an online banking company called X.com which was created by Elon Musk. After the purchase Musk wrapped up his work on all other digital wallet apps and focused on Confinity.

Finally, in 2001 the company got the PayPal name. eBay bought it in 2002 and made it a publicly held company in 2014. After all this confusing journey, PayPal ended up in Daniel Schulman’s hands, and at the time of writing, this is actual.

An interesting fact is that in 1999 PayPal was evaluated as one of the top worst business ideas and now the idea took off resulting in 400 million active users and more than $21 billion annual revenue, accompanied by global brand awareness. These facts make PayPal website integration almost necessary for modern businesses.

Each year the company’s market share is growing, which means there are plenty of reasons for consumers to use it.

One of them is the high demand for online shopping in recent years, which requires safe, reliable, and simple service that can be achieved within the integrating PayPal payment gateway. Also, this is one of the top digital wallets for freelance workers to get paid, especially in the U.S., where the service takes no transaction fees inside the country.

The popularity of this company is not a coincidence; every year marketing expenses grow rapidly. Just in 2015, it was 937 million whereas in 2020 it was almost 2 billion dollars. After seeing such numbers we shouldn’t be surprised that PayPal’s slice in selecting buy buttons is the biggest in the US leaving other competitors far behind.

Also, customers are more likely to complete a purchase within one web session if your store completed paypal website integration. And 54% of users are willing to purchase from merchants who have this payment method. This proves a high consumer’s trust in this service.

The platform functions as a mobile and web wallet allowing users to perform online transactions like online purchases or bill payments via credit/debit card or bank account. Unlike its competitors, it does not require linking the user’s bank accounts to their online wallet; a customer simply needs to create a profile by entering basic personal and card data.

So, PayPal payment integration gives a major benefit to individual customers and small and mid-sized businesses as a basic payment gateway type, while big influential companies apply its solutions as an additional option for customers to choose the most convenient method.

With a big range of transaction options, this company becomes far more than a simple digital money processor. For this matter let’s take a look at payment methods for businesses PayPal supports:

• Express checkout. PayPal express checkout integration guarantees fast and easy transactions for your consumers. Clients don’t need to fill up any billing or shipping information, making PayPal integration in website, iOS, or Android user-friendly and thus helping to increase sales. The platform’s tools process the payment, so a client is redirected from the site/application to perform a transaction and returns back to finish the purchase when payment is made. Mind that PayPal express integration comes into use only if a customer already has a PayPal account. It doesn’t have any setup fees for merchants, but they have to pay for each transaction (2,9% plus 0,30$). On the other hand, sellers do not need to pay any monthly dues, which is convenient for many businesses.
• Direct payment. The Direct payment model enables customers without PayPal profiles to use its services while online purchases. Direct PayPal checkout integration allows making transaction processes part of your website/application, avoiding redirection. The user has to confirm an order and click Pay; after that, your app appeals to the API for completing this order. It is the most convenient method if a client wants to use a debit or credit card. Consumer stays on your website and is unaware that PayPal processes the transaction. The Direct payment method claims to provide a better user experience as it looks more familiar and user-friendly.
• Recurring payment. Recurring payments are usually used for subscriptions: transactions are performed annually according to agreed payment plans. To use this model, you will need to have a business account and do simple PayPal integration. To get started, you have to manage your subscription plans, provide details about your product, offer subscription options for your customers to choose from, decide on a billing cycle, and add the relevant button for your website/app. Remember, that now, PayPal Recurring Payments do not work with ACH transfers and e-checks.
• Mass payment. The Mass payment model, Payouts, comes into use when one payment must be divided between several accounts. This method represents a convenient way to pay commissions, rewards, or general charges. Payouts are good for retail and e-commerce companies, businesses with contingent workers, service providers, and others. One of the drawbacks of this option is that you have to use your PayPal balance or fund your account through a bank transfer, but you can’t use debit and credit cards. Recipients don’t pay any fees in this payment model, whereas senders do. Website, iOS, or Android PayPal integration is developer-friendly since the service provides simple RESTful API standards. You can learn more about it in this article. Remember, you can use only PayPal funds, but credit or debit cards won’t work in mass payment. Be sure you have enough for all transactions and fees. Also, note that this option of web or iOS/Android PayPal integration is available only for Business accounts.

These are the main payment methods for businesses that are actual now. It is crucial to decide which works best for your targets so you can save time and increase your clients’ loyalty by PayPal integration in website, iOS, or Android.

Apart from PayPal, there exist varied systems that may be integrated to perform transactions in your website/app. Most popular alternatives include Apple Pay, Google Pay, Amazon Pay, Stripe, Braintree, Payoneer, TransferWise, Dwolla, and others.

Industries That Benefit from Applying Digital Wallets

Now, online payment systems are tightly connected to the financial sector. It has been used in many industries since online money transfers took a firm stand.

• Retail and eCommerce businesses. When some customers prefer paying by card or using cash on delivery, most users prefer digital wallets and admit that this method is more convenient for them. So, eCommerce is one of the main businesses that benefit from fast and safe payments, which reduce the number of abandoned carts and make consumers’ experience pleasurable. Except for protecting vendors from different kinds of fraud, digital wallets make genuine refunds and return hassle-free. Since they are unavoidable in sales, merchants can make them a tool for building trustful relationships with clients by comforting this experience which is good for the long run. Remember that it is crucial to provide your customers with a variety of payment methods.
• Financial institutions. In 2020 MasterCard reported a 40% growth in online transactions globally. If you have a financial company and offer personal or business loans you can benefit by implementing an online payment system to your service. Digital wallets save users’ information, so they don’t have to fill in card details again, saving time for your clients.
• Telecommunication businesses. The first and foremost reason to use digital wallets is similar to other industries: ease of use. In telecoms, clients can send money to other users and make bill payments. Besides these essential services, now some financial companies pay the telecoms for using their loan services.
• Transportation and logistics. Recently cab companies’ tendency changed to using e-wallets which makes transactions more efficient. Also, if you are offering logistic services a digital wallet will help you provide a better user experience and save time.
• Food and grocery industry. Consumers can pay with online payment systems in most cafes, restaurants, and supermarkets. Moreover, some of these companies provide bonuses and discounts for paying through digital wallets, increasing clients’ loyalty.
• Entertainment businesses. It is becoming more and more convenient to use e-wallets for buying tickets for concerts, theatres, or cinemas. Also, users can pay for music, television, radio subscriptions via their digital wallets. For this matter, it is essential to keep in mind that PayPal iOS integration or Android one can be a must-have for certain companies.

In our opinion, digital wallets work beneficially for almost any industry you can think of. But to make a final decision and dig more into how to integrate PayPal payment gateway, you should know the benefits and drawbacks of a particular online payment system.

The Pros and Cons of PayPal Payment Integration

In the last generations, possibilities to pay online changed a lot of businesses’ tendencies. Digital wallets have made many services and companies more profitable. Like all business solutions, money transfer systems have their pros and cons. It’s crucial to be aware of their advantages and disadvantages so you can make sensible decisions for your company’s strategy.

Advantages

Apart from making online credit card payments an easy option for your customers, PayPal app integration offers a wide range of benefits to your business:

1. High-Level Security

PayPal strives to ensure high-level cybersecurity to its users. It encrypts sensitive user info and stores it on a separate server possessing more security protocols. That means that even in case of a general server breakdown, it will keep customer data protected and safe. Inner security system operates numerous algorithms verifying every transaction and sends notifications for users to confirm money transfers.

2. No Fees for Personal Transactions

Unlike other money transferring services, PayPal does not charge fees if a customer sends money to their friends or family members. It claims that sending money to dear people who live, study, work in another city or abroad will become a pleasant gift with a fast and free transaction system.

3. PCI Compliance

A truly undeniable benefit PayPal payment integration offers to entrepreneurs is its firm legal basis. Dealing with e-commerce, you must be assured not to violate laws performing money transactions. PayPal solves the issue by providing Payment Card Industry Data Security Standard (PCI) compliance. Going for PayPal mobile app integration, you are assured of doing things legally and not being afraid of incautious violations and following penalties.

4. Varied PayPal API Integration Methods

PayPal is wide-open to partnering or cooperation, offering to developers varied APIs to use during development processes. It provides a separate virtual testing platform – PayPal Sandbox – for a development team to examine app’s/site’s productivity and performance while processing API requests and responses without engaging real accounts and transactions.

Besides, because of this money transfer system’s immense popularity, there are official instructions on how to integrate PayPal payment gateway and customized tutorials, manuals, community discussions, and other educational materials that will help in solution development.

5. Worldwide Reputation

PayPal stands among the most widespread payment service providers around our globe, covering 200 different countries. It offers customers performing transactions in one out of 26 most spread currencies with no country binding. Over the years of excellent performance, it has gained an expert reputation and engaged more than 390 million loyal users in the second quarter of 2021. It is now cherished and adopted by a majority of e-commerce companies as a primary online payment provider.

6. Customization & Convenience

PayPal cares about providing a positive user experience by applying customization tools. When creating a profile, a user can easily optimize further payment operations using an autofill option, as all personal information is stored within this system.

7. Automized Payments

PayPal offers an automatized payments function for subscription-like payment plans. If a user subscribes to a particular pricing plan, PayPal web integration provides automatically generated recurring bills for customers not to waste time on repeating the same actions annually by themselves.

8. Adaptive Combinability

As PayPal offers a wide range of interaction methods, it is easily compatible with other e-commerce tools like shopping carts, accounting software, and many more. Adaptive combinability makes PayPal API integration advantageous options compared to less flexible competitors.

With all these benefits you see, PayPal became a full value tech-based financial institution and its solutions work for many businesses.

But do these advantages of PayPal outweigh its disadvantages? Let’s see.

Disadvantages:

We wouldn’t be fully honest with you if we ignored the drawbacks of this system. Like any other solution, PayPal web integration possesses certain concerns to be aware of:

1. Received Payment Fee

After PayPal server integration, the company charges users for receiving payments from customers who buy products or services. When conducting business deals via this money transfer system, entrepreneurs should be ready to pay fees from 5 to 10 percent of the total sum.

2. Frequent User Activity Blocks

To ensure high-level cybersecurity and eliminate frauds, PayPal operates numerous algorithms checking up user activity. These algorithms mainly take hold of unusual behavior, including too big transaction sum, untypical money transfers, multiple new receivers at once, and other options. The actions, defined as suspicious by security algorithms, provoke temporary bans or additional verifications to ensure user data safety.

3. Payment Delays

Another pitfall, which makes PayPal gateway integration not so sunny, is payment delays. This system may hold on to money for up to 21 days, depending on transaction details to eliminate possible fraud threats. Payment delays happen if a relatively passive user demonstrates unusual activity, so the security system checks the transactions to prevent law violations. Besides, delays are typical for specific product categories (electronics, gift cards, event tickets, and so on), often becoming fraud subjects.

4. No Currency Conversion

Although PayPal operates various currencies worldwide, it does not offer a currency conversion option. Customers set their preferred currency at the very beginning and cannot convert it at once. The only way is to shift whole accounts via particular inquiry and official service permission.

5. Sandbox’s Autonomous Status

PayPal Sandbox represents a different platform, apart from the leading service influencing app/website-platform partnering. The separation of Sandbox imposes certain limitations on user-service interaction and slightly lowers general interaction speed because of additional checkouts and redirects. Besides, during PayPal integration in Android, iOS or web developers must always be ready to meet unexpected discrepancies and problems while moving the project to its final version, as an operational process slightly differs.

Now you know the main pros and cons of PayPal payment gateway integration in Android, iOS, or web, and you can make sensible decisions whether you need it for your business or not. Remember, there are plenty of alternatives, and you can read more about them here.

But if your decision to complete PayPal gateway integration is strong enough to advance, let’s continue. The first primary step is creating a relevant profile in this payment system.

How to Set Up a PayPal Account

PayPal offers two basic options to set up an account: for personal use and business needs.

To create a personal account, you should sign up by entering valid personal and bank data necessary for performing financial operations. With a Personal profile, you can make online purchases via credit/debit card, receive or send money to friends and family members, and get limited payments from sales at low fees. Besides, there are Premier accounts for personal use with no limits and broader functional scope.

If you conduct business online and need PayPal gateway integration to receive payment transactions, you should create a Business account. With such a profile, you can operate under your company’s name, receive transactions from clients at low fees, or set up multi-user access. Like the Premier version, the Business profile offers full functional scope and sets no limits per sale transactions.

Regular Personal accounts can be updated not only to Premier versions but also to Business ones.

Now, when you understand how this system works, we will tell you basic steps on how to integrate PayPal payment gateway in website, iOS, or Android. Although this e-wallet system provides businesses with simple standard APIs and gives full-scale instructions, our experience shows that it might not be enough. The advice below will simplify the process.

How to Integrate PayPal Into Website or Mobile Application

We assume you might have an account in digital wallets and maybe even know the first steps, but we decided to start from the very beginning and show this path from the business’s side.

1. Get an Account

Before starting PayPal integration in iOS, Android, or a website, you should create an account by entering basic info about the company or product, ensuring your legal status. Although the procedure seems routine, keep data valid, as it influences the correctness of access token, which makes your company recognized by algorithms.

2. Choose Appropriate API Model

For the next step, you should choose a suitable API model. There are several ways of PayPal API integration. Let’s take a closer look at them:

• Website payments standard API. Standard checkout API represents the simplest way to integrate PayPal into website. It allows transactions via credit card or PayPal profile sending payment details through a POST request.
• Express checkout. Express Checkout API allows conducting fast and easy payments via redirecting users to their PayPal profiles for transaction confirmation.
• Adaptive payments. Adaptive Payments API allows choosing between several payment ways to find the most suitable method in every particular case.
• Payflow. Payflow API is used while performing direct payments on your web or mobile app via users’ credit cards. Payflow API offers several development variants including Payflow Pro API (uses iframe; data entering form is provided by PayPal), Payflow Link API (similar to previous one), and Payflow API namely (data entering form is provided by your site/application).
• Mass pay. Mass Pay API is applied to unite several payments into one transaction. Mind that Mass Pay API is available only in case the customer has a PayPal profile.

3. Create a Sandbox Account

Sandbox environment allows a development team to test how a product works before PayPal integration in Android/iOS app or site.

With the Sandbox profile, you can observe the app’s progress, track metrics, or experience imitated chargebacks, complaints, and transaction delays/denials within a virtual testing environment.

Remember that test and production versions are different, which can cause errors when you transit from one to another.

Increase Your Business Potential

We covered the main principles of PayPal client-side integration, so now you are aware of the main pros and cons of this process. all that will help you make a sensible decision and increase your profit using digital wallet opportunities.

Implementing a payment system into your website or mobile app paves the way of keeping business successful in the modern market. PayPal payment integration stands among the most popular options chosen by e-commerce entrepreneurs and development companies.

If you are about to jump into integrating PayPal (or any other payment gateway) into your mobile or web app, then you should partner with a reliable software vendor that is wide-open to support, and that is OpenGeeksLab. We use multiple novel technologies like Flutter, React Native, Angular, React.js, JavaScript, Node.js, and many more, to deliver solutions that make a difference and skyrocket your business. Save your time and contact us today!