How PayPal Can Help Businesses

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MARCH 10, 2011

Growing Your Business With PayPal



GLOBAL CUSTOMER FOOTPRINT

94M active accounts

190 markets + 20 local language sites + 24 supportedcurrencies

MAINSTREAM CHECKOUTOPTION

72% of U.S. online buyers have a PayPal account(Source: Forrester 2009)

Off eBay volume now exceeds on eBay spend

PayPal¶s Total Payment Volume in 2010represented nearly 18% of global ecommerce!*

SIGNIFICANT VOLUME OFPAYMENT PROCESSING

PayPal transacted over $3,380 every second in 4Q

Approximately $3 billion of stored revenue flowsthrough PayPal accounts every 2 weeks

Small merchants typically see a lift of 15% ormore to their website sales when they add PayPal

LEADING CREDIT & FRAUDCAPABILITIES

Industry leading risk management

Years of fraud expertise

SINGLE COMPANY PROVIDINGCUSTOMER CHOICE

Single merchant facing organization

Variety of payment products to assist merchants ingrowing sales

PayPal, a leader in payments

*

*Based on Forrester estimates of the top 12 global e-commerce markets



Analysis of 2009 Online Spending$ Billions

$246 Billion is Spent Online Annually

$246

OnlineSpending

Travel

29%

Auto

7%

Other

41%

Apparel

9%

C&E

14%

$71

$101

$17

$34

$22

Source: Forrester Research, PhoCusWright & Internet Retailer



55%

69%

51%

20%

22%

11%

24%

17%

6%

PayPal is second in online usage, only to Visa

All Others

W hen was the last time you used each of the following payment methods to purchase something online? (% used past 12 months)

S ource: 2009 PayPal Brand Tracker, GfK Base: Total Population



2/7/2012 5

Consumers choose PayPal because of the 3 C's

ConfidenceAccording to Gartner, U.S. online consumers trust PayPal more than

Visa or MasterCard

Convenience

PayPal Express Checkout allows users to checkout in fewer steps,without entering their billing or shipping information

ChoiceBy checking out with PayPal, consumers can access a variety of

payment/funding options through a single access point



PayPal storesconsumers financialinformation and keeps itsafe. PayPal sends themoney ± but never sharestheir information

Consumers choosefrom multiplefunding sources topay for a purchase

Credit Card

Bank Account

PayPal Balance

The money goesimmediately to onlinemerchants²regardless of which

funding sourceconsumers chose

H ow does PayPal work?

$3 BILLION IN PAYPAL ACCOUNT S TORED VALUE I S S PENT EVERY TWO WEEK S



PayPal drives sales for merchants big and small

What gives you an edge in competition is offering the best and greatest variety of choices to the customer. You cant afford not to have a payment option that

your customers looking for because they can find it at the next site in aheartbeat

Danny Lee, SVP

We brought PayPal in here and it increased our sales and cut our transactioncosts in half. PayPal is simply a best practice; you have to have PayPal on your site.

Daniel Keane, President

We are growing from 35 to 40% a year, and part of that success is due to making thetransaction process flow smooth and easy. Simply positioning the PayPal logo

strategically has made a great deal of difference.We get about 25% of ourtransactions using that payment method.

Denis Boyton, cofounder

Once we made the switch, we saw sales increase 20%. When people see thePayPal logo, it builds their confidence and they are more willing to make their purchasewith our company.

Martin Zadorian, CEO

Partnering with PayPal during the holiday season to offer our customers significantpromotions is a great way to bring value to both Toys R Us and the PayPal customer. Inparticular, we experienced very strong conversion on our PayPal holiday checkoutpromotions.

Michael Scharff, GM, Toysrus.com



2/7/2012 8

With PayPal, BikeWagon Shifts Payments intoHigh Gear! BikeWagon provides high-performance,

name-brand bike parts and accessories atdiscount prices to customers around the

world.

PayPal Means GrowthGeorge Majors, one of the site¶s founders,

explains that without the help of PayPal, theretailer would have had a difficult time growing.

³As we expanded, we needed a more robustpayment system,´ he explains. That¶s whenBikeWagon added Website Payment Pro andExpress Checkout. With Website Payments Profor credit card transactions, customers remainon BikeWagon¶s site; and because they have apre-integrated cart, full control of the customer

experience is maintained throughout the entireshopping process. Also, for PayPal transactions,with PayPal Express Checkout, customers checkout quickly with only three clicks, and then arereturned to Bikewagon.com for up-sell, cross-sell, and marketing opportunities.

³Our businesshas doubled every year since we

started. Part of that goesback to our

ability to take

PayPal.´

²G eorge Majors,BikeWagon Founder



2/7/2012 9

For SimplyEyeglasses.com, PayPal Builds Trust,Fashionably Fights Fraud

The Coral Springs, Fla.-based retailer provides a varietyof designer, name brand, and special purpose frame

styles as well as a multitude of lens types ensuring thatevery customer will be able to find exactly what theyseek.

³Because we work with fashion that is oftencounterfeited, the number one question we getfrom customers is whether or not our merchandiseis authentic,́ says Keith Fritz, President at

SimplyEyeglasses.com.

³That¶s why picking the right payment partner is socrucial for us. New customers may not know whowe are, or if we¶ve only been open for a day or tenyears,́ Fritz adds. For all of those reasons, Fritzneeded to pick a payment provider that would helpto instill a level of trust in SimplyEyeglasses.com¶scustomers, as well as to help minimize any fraudthe company might suffer.

³PayPal was the obvious choice for us; some of the primary reasons we chose PayPal were itswidespread familiarity, brand recognition, andability to fight fraud,´ Fritz says.





Gain new customers and drive sales withPayPal Express Checkout

Better for Buyers

Gives buyers a fasterway to pay

Provides convenienceand security

Allows customers toutilize variety of paymenttypes - PayPal balance,bank account, or creditcard

Better for Business

Access 94 million activeonline shoppers

17% lift in sales*

A flexible payment solution

for retailers large and small $3 billion of stored revenue

moving through PayPalaccounts every 2 weeks

Website Payments Pro comes with Express Checkout ± PayPal¶s premier

checkout solution

Increase conversion by streamlining the checkout process for buyers

Gives you the fastest, easiest way for buyers to pay with PayPal

*Based on a study by IPSOS in Q2 2010, a side-by-side comparison of PayPal's processing fees vs. competitors' processing feesamong 88 randomly selected small and medium sized businesses processing up to $15 million per year online.



In 2010, Ipsos conducted a study on nearly800 small to medium sized merchants thatcurrently had PayPal Express Checkout.

Over 80% of merchants who offer PayPalsExpress Checkout noticed an increase in theirsales (see Figure 1).

Overall increase in sales averaged 17%

Of those who noticed an increase 84%noticed an increase in sales within 3 monthsof launching PayPal (see Figure 2).

Research proves PayPal Express Checkout drivessales

83%Have Increased

Sales

Figure 1

% of with Increased Sales

Figure 2

Length of Time Before NoticingIncrease

84%Within 3 Months

Based on a study by IPSOS in Q2 2010, a side-by-side comparison of PayPal's processing fees vs. competitors' processing fees among 88 randomlyselected small and medium sized businesses processing up to $15 mill ion per year online.



Research firms confirm the benefit of PayPal

Confidential and Proprietary13

Over 75% of merchants feel Express Checkout wasworth the installation

Merchants saw between 26 ± 40% of sales going throughExpress Checkout

39% saw an increase in sales

2010 Mercator study of 100 small ± to medium sized businesses that use both Website Payments Pro andExpress Checkout

Average sales lift across the five merchants is

25%

Safety is by far the top driver of way customersselect PayPal, followed by convenience

2010 Northstar survey of customers that completed transactions at 15 small businesses thatutilize Website Payments Pro and Express Checkout



PayPal customer experience

CU S TOMERS S IMPLY ENTER T H EIR PAYPAL PASS WORD AND

CONFIRM S TORED BILLING/SH IPPING/FUNDING INFORMATION

Step 1: Log Into PayPal Account Step 2: Confirm Purchase Information

Documents

How PayPal Can Help Businesses