A while ago, PayPal Plus has been announced by PayPal and they pronounced it to be publicly available. However, neither we nor our customers really knew what this was all about, which conditions applied and if it was advisable to use it right away.

At the Meet Magento Switzerland, I had the opportunity to talk to PayPal representatives and shed some light on this payment service for Magento. But let’s start at the beginning…

What is PayPal Plus?

PayPal Plus provides the option to not only use PayPal Wallet for transactions but also credit card, direct debit and purchase on account – for all customers of your website, whether they have a PayPal account or not. This feature has been available for a long time only in the United States and the United Kingdom, but now it has finally found its way to good ol’ continental Europe.

The customers’ payments are transferred to your PayPal account just like regular PayPal Wallet payments. So you don’t need an extra account or anything similar, which is very comfortable.

What are the advantages of PayPal Plus?

The question whether PayPal Plus is better than Ogone, Payone or any other payment service provider cannot be answered here because it depends on too many individual factors. But as with any PSP, it is a great advantage when all important payment methods in Germany (with the exception of Sofortüberweisung) are conducted by just one provider. This safes you a lot of time in your accountancy and, thereby, money.

It is also important for customers of BillSAFE. As the subsidiary of PayPal no longer accepts new customers and PayPal now offers its own solution, BillSAFE’s future is uncertain. Actually PayPal has not yet decided if BillSAFE’s customers are to be allured to switch to PayPal Plus. It would be a sensible decision for those BillSAFE customers who receive BillSAFE’s standard conditions. They pay a fee of 4% for each purchase on account which is a lot more than what PayPal Plus charges for purchase on invoice. (For more information on pricing, please see the following section). If you profit from better conditions at BillSAFE than what PayPal Plus has to offer, you should of course wait for upcoming developments.

A great advantage is that even for orders to be paid on account, you immediately receive the amount in your PayPal account – even if the shop’s customer has not yet transferred the money to PayPal. PayPal takes the risk and, if necessary, takes care of the debt collection.

Moreover, PayPal Plus is available to all merchants. It is only purchase on invoice which needs to be separately unlocked. Here the merchant is checked: Is he to be trusted? What kind of products or services does he sell? etc. As depending on the range of products, customers have a different tendency to not pay their bills.

What is the pricing like? Is there room for negotiations?

In general, PayPal Plus comes with three revenue steps:

1. 2.49% plus 0.35€ per transaction (monthly revenue below 5,000€)
2. 2.09% plus 0.35€ per transaction (monthly revenue between 5,000 and 25,000€)
3. 1.79% plus 0.35€ per transaction (monthly revenue above 25,000€)

These fees are valid from presumably from January 2016.
For further information please see: https://www.paypal.com/de/webapps/mpp/paypal-fees

The revenue steps are based on the monthly revenue. If an increase in revenue leads to a higher step, you are nowadays automatically upgraded and better conditions are applied! Earlier, this was not the case and you had to contact PayPal’s support in order to get you manually upgraded.

When it comes to negotiability, there is nothing to be done about the first and second revenue step. The conditions here are fixed. Since the account managers at PayPal are responsible for several hundred merchants each, there is no chance for priority treatment. In the highest revenue step your prospects are a lot better. When a store has a revenue of at least 5 million €, a dedicated account manager is assigned to this shop who will only be responsible for a handful of merchants. Depending on your revenue, there is a lot more room to negotiate and more bargaining power on the merchant’s side.

What about the technology? How is it integrated in Magento?

We have implemented the module in some of our clients’ shops and we also use it in our own online store. The module itself was developed by the company iWays. The installation is business as usual, configuration in Magento’s backend is self-explanatory. Just like it is the case with the PayPal ECM method, you need a client ID and a secret key. Both can be retrieved from your PayPal account.

Somewhat irritating is that when you want to offer different payment methods, you need to explicitly name them in the PayPal module. There’s a reason for it: All payment options are then displayed via the PayPal module. As a result, they all look uniformly and it is very unlikely that customers get the impression of a third payment provider’s involvement.

We have not yet been able to do a thorough module check. We were only able to examine it using CodeSniffer and the Expert Consulting Group’s ruleset. The quality is okay, no security vulnerabilities have been detected. There were only seven remarks, non of them security related.

Order workflow

From our own experience of using PayPal Plus, we can report that a lot less manual checking of orders is necessary and more automatisation is possible – thanks to the payment method pay upon invoice which guarantees the payment to us.

If you want to create a credit memo, watch out for some details. First, if you plan to create the credit memo in Magento’s backend to have it automatically transferred via PayPal, go to the invoice first and then click on Credit Memo. Otherwise, you can only create an offline credit memo, which does not result in any transaction.
Second, for credit memos that do not credit the whole order amount, you can do partial refunds. However, the communication between Magento and PayPal relies on the product prices. So partial refunds are only possible if they refund the whole price of one or many products. For more granular refunds, log in to PayPal itself and create an individual refund there. For your bookkeeping, you can then create the offline credit memo in Magento.

Another important information for anyone planning to use PayPal Plus for purchase on account is that the current module is not able to process payment information for customers, such as where to transfer the pending amount, what to enter as reason for payment, etc. As a result, you need to manually write an email to your customer providing this information. It is possible to create your own module to process the information needed. How this can be done is explained in the integration guide. That’s what we are about to do for our customers. If by the time we are done PayPal has not yet offered an official solution, please feel free to contact us.