[FooBarWidget]

How is this possible? Through Paypal customers can also pay with credit cards, and even more. They can use checks, or bank transfers (very important in Europe where credit cards are not as popular), etc. Why would usage of Paypal decrease conversion compared to pure credit cards?

My guess is that a lot of customers don't know what Paypal is and don't realize they can just use their credit card.

[joeblubaugh]

And the PayPal flow is godawful - direct to a new page, get prompted to: 1. Log in. 2. Create Account. 3. Enter payment deets. (Small text near bottom of page, not always available, depending on the merchant).

Even if you have an account, they don't consistently keep my default payment method - often switching back to my bank account even when I've made a CC my default.

This all adds up to a level of friction that I hate, hate, hate, hate as a user. I can understand people abandoning a purchase at that point.

[dcaldwell]

In my experience with a nonprofit, on whose board I serve, this is exactly the case with PayPal. Even if you're very upfront before you send people to PayPal that yes, they can pay with a credit card, once they arrive at PayPal they get confused. I've even had PayPal show me a popup ad for a PayPal branded Mastercard when I was trying to checkout somewhere. Their UI isn't "branded" like the site that the customer was just on so that's confusing in and of itself. In addition, paying with credit card on a PayPal checkout page isn't the main action - you have to search for it. Combine all of those elements and you get a much lower conversion rate.