Merchants that have added PayPal Inc. as a payment method have attracted new customers who tend to spend more, according to research from Forrester Research Inc.
PayPal, a unit of eBay Inc., commissioned the study and announced the results on its blog Wednesday. The study looked both at PayPal's online payment system and its Bill Me Later instant online credit system.
"The results reaffirm what we've said all along — adding PayPal and Bill Me Later to your site helps drive sales," Jim Hunt, PayPal's senior director of merchant services, wrote on the blog.
According to the study, consumers use PayPal for 6% to 12% of purchases at merchants that offer it, and 10% to 30% of those transactions are new customers. For Bill Me Later, which allows merchants to offer credit for purchases, the payment method was used for 3% to 6% of transactions and roughly one third of those were new customers.
Customers spent 20% to 40% more when using Bill Me Later, the study found.