For merchants, reducing friction in the digital payment process is a crucial component to meeting customer expectations and improving conversion rates. Whether customers are purchasing everyday goods, high-value items, or signing up for recurring subscriptions, customers expect fast, familiar, and flexible payment experiences. At the same time, merchants face rising pressure to operate across borders, accommodate diverse payment preferences, and manage post purchase complexity while protecting conversion and customer trust.
To better understand how merchants are addressing these challenges, PayPal commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study on PayPal Checkout. Forrester interviewed seven decision‑makers across global retail, e‑commerce, and software organizations and synthesized the results into a composite organization with $2 billion in annual revenue and global operations. The findings reveal how checkout experiences influence growth, trust, and operational efficiency.
Interviewees in the study describe their prior environments before PayPal Checkout involved fragmented or card‑centric checkout experiences that no longer align with how customers want to pay. These limitations often show up at the most critical moment: cart conversion. Higher abandonment rates, lost international sales, operational strain in refunds and disputes, and hesitation around larger purchases can all stem from payment friction.
The study found that organizations adopting PayPal Checkout achieved a risk‑adjusted return on investment (ROI) of 145%, with a net present value (NPV) of $19.2 million and a payback period of less than six months. These results underscore how improvements at checkout, often viewed as incremental, can influence revenue trajectories.
What’s driving these outcomes is not a single feature but a unified checkout that brings together reduced friction, trusted payment options, and flexibility designed around customer behavior. Interviewed organizations described PayPal Checkout as helping more customers complete purchases they intended to make, rather than forcing merchants to rely on incremental traffic or promotional spending to grow.
As one senior director of global payments and fraud in software explained, “PayPal Checkout increased the conversion by about 10% to 15% globally. It just makes sense to have it.”
One benefit study uncovered was increased cart conversion, including for guest checkout flows. By minimizing manual data entry and offering a recognizable, trusted payment experience, PayPal Checkout helped merchants reduce abandonment at the final step of purchase.
In the composite organization, the introduction of PayPal Checkout with Fastlane drove a 150% relative increase in cart conversion. Over three years, this improvement delivered $9.0 million in risk‑adjusted value.
This mattered most in moments where friction was costly. Interviewees cited scenarios involving customized goods, higher‑priced items, or long consideration paths, where customers were especially sensitive to checkout complexity. Fastlane played a role here by accelerating guest checkout and reducing errors that can lead to authorization failures.
As a vice president of finance and accounting in furniture retail and e-commerce described it, customers who used Fastlane completed purchases at meaningfully higher rates than traditional guest checkout, often exceeding 70% conversion, preserving revenue that would otherwise have been lost at the last moment.
Beyond conversion, PayPal Checkout also influenced customer retention, especially for organizations with repeat purchases or subscription models. Trust emerged as a critical factor. Customers were more willing to authorize recurring payments, renew subscriptions, and return for future purchases when PayPal was available at checkout.
The study found a 20% uplift in customer retention, resulting in $7.3 million in risk‑adjusted value over three years. Interviewed organizations pointed to higher approval rates for subscriptions, smoother renewals, and reduced friction in refunds and cancellations as drivers of this improvement.
A senior director of global payments and fraud noted that retention for PayPal transactions was materially higher than for card payments, largely due to customer confidence in PayPal’s ability to manage changes, cancellations, or disputes without friction.
For global merchants, international checkout can be a point of failure. Payment preferences vary significantly by country, and card‑only approaches often struggle to meet local expectations. The TEI study showed that PayPal Checkout played a central role in preserving and expanding cross‑border commerce.
As organizations scaled PayPal Checkout internationally, the composite organization’s nondomestic revenue share grew from 25% to 50% over three years. This expansion contributed $4.7 million in risk‑adjusted value, driven by reduced abandonment and higher conversion in markets where PayPal is a baseline expectation.
Interviewees emphasized that in many regions, not offering PayPal would directly result in lost sales. In some European markets, PayPal and installment payments dominate checkout behavior, making them essential rather than optional.
The study also found that PayPal Checkout increased average order value (AOV) by helping customers complete larger purchases with less hesitation. Pay Later installment options played a key role here, particularly outside the US, where customers are more accustomed to splitting payments over time.
In the composite organization, Pay Later transactions drove a 15% AOV uplift, while remaining transactions experienced a 5% increase, resulting in $3.9 million in risk‑adjusted value over three years. Interviewees described customers buying higher‑priced items or adding more products to their carts when installment options were available.
Enabling Venmo within PayPal Checkout helped merchants connect with younger, mobile‑first shoppers who increasingly prefer peer‑to‑peer wallets over manual card entry. The study found that Venmo‑driven revenue grew from 5% to 11% of online revenue, contributing $7.6 million in risk‑adjusted value.
Not all of PayPal Checkout’s value was easily quantified. Interviewees also cited meaningful operational improvements, including simpler refund and dispute workflows, lower chargeback rates, improved authorization performance, and a reduced PCI and compliance burden by keeping card data out of merchant systems.
These benefits translated into better customer experiences and less strain on internal teams, outcomes that strongly influence long‑term satisfaction and scalability.
Checkout is no longer just a technical endpoint. It is a strategic lever that influences revenue, customer trust, and operational efficiency across the business.
For the organizations interviewed, PayPal Checkout helped transform checkout from a point of friction into a source of competitive advantage, delivering strong financial returns while aligning payment experiences with how customers prefer to pay.
To hear the full story from the customers themselves and explore the detailed financial analysis, read “The Total Economic Impact™ of PayPal Checkout,” commissioned by PayPal and conducted by Forrester Consulting.