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A customer finds the product. They want it. They're ready to buy. Then the page takes too long to load, the payment options don't fit, and the moment passes. Mike Sutter, PayPal's SVP Head of Checkout, and Anand Sivadasan, PayPal's VP of Pay Later, call this the most expensive problem in commerce — one merchants are largely responsible for solving themselves.
For Sutter, the solution points to a fundamental shift — toward intelligent commerce, where discovery, payment, and loyalty work together rather than in isolation. For merchants, that means rethinking checkout not as the final step in a transaction, but as part of a connected customer experience that begins long before the payment screen. The fix, it turns out, is less about technology and more about where merchants choose to focus.
Even small moments of friction carry a real business cost. A slow-loading button, too many steps, or limited payment choice can be enough to interrupt a purchase that was otherwise on track to convert.
That was a central theme in a recent PayPal Beyond session featuring Mike Sutter and Anand Sivadasan. Their message was straightforward: in today’s challenging commerce environment, merchants need to think about checkout less as a back-end function and more as part of their growth strategy. The data backs that up: 31% of customers abandon carts because of a complicated checkout process1 rather than product dissatisfaction, and with customer acquisition costs up 60% over the last five years2, those lost conversions are increasingly expensive to absorb.
Consumers may discover a brand through marketing, social media, search, or word of mouth, but their impression of the buying experience often comes down to what happens at checkout.
Sutter pointed to three expectations that consistently surface in consumer research: speed, flexibility, and value. In practice, that plays out differently across shoppers — some want the fastest possible path to purchase, others are more likely to complete a transaction if they can split payments, and many now expect a loyalty benefit or offer before they commit. For merchants, meeting all three is less about adding features and more about removing friction at the right moment.
PayPal's latest checkout updates represent a complete rebuild, not a cosmetic redesign. In early testing, PayPal is seeing consistent 2% to 5% conversion lift for first-time users3, and conversion rates exceeding 95% for returning users4.
The larger takeaway for merchants is not just that checkout can be faster — it's that a simpler experience directly protects conversion, particularly on mobile where patience is shortest. For merchants reviewing their own payment flows, it's worth examining checkout as part of the broader customer experience, not just a technical handoff.
The session also focused on the role buy now, pay later plays in purchasing decision, especially when it’s offered earlier in the buying journey.
Sivadasan framed buy now, pay later as more than a payment preference. When presented at the right moment, flexible payment options shift the customer's decision from whether they can afford a purchase to what they feel comfortable buying. That distinction matters — it influences not just whether a customer converts, but what they buy, driving higher average order values in the process.
The consumer adoption is already there at scale. PayPal Pay Later has processed 279 million transactions globally since launch and counts 60 million users worldwide — a 20% increase year over year.5 For merchants, that means the appetite for buy now, pay later options doesn't need to be created. It needs to be met with trusted, flexible payment experiences embedded throughout the shopping journey.
For merchants selling products with multiple tiers, bundles, or premium options, this is especially relevant. If customers see flexible payment options earlier in the journey, they're more likely to explore higher-value choices rather than defaulting to a lower price point.
That's why placement matters. Sivadasan was direct: if consumers don't see BNPL during the purchase journey, "they either drop off altogether or they settle for a lower price product." The numbers bear that out — merchants that surface PayPal Pay Later messaging/button earlier in the funnel, including on product and cart pages, see a 13% lift in PayPal sales6, while average order value increases by 91%7. PayPal's Pay Later network includes more than 90 million pre-approved consumers globally8, with a 90% approval rate9.
Still, results vary by category, price point, and customer mix. Merchants should think carefully about where installment messaging fits best in their purchase journey and how it aligns with their broader merchandising strategy.
Beyond checkout performance and payment flexibility, both speakers pointed to a broader shift in commerce: reaching consumers efficiently when intent is already high.
As acquisition becomes more expensive, merchants need to get more value from the traffic they already have. That makes relevance more important across the funnel — from personalized offers to loyalty programs to surfacing the right payment option at the right moment.
The broader lesson is not that every business needs to redesign its checkout overnight. It's that speed, flexibility, and relevance deserve a more central place in growth planning. A faster checkout reduces drop-off. Flexible payment options can support larger baskets. And well-timed, relevant value propositions help merchants compete in a market where attention is harder to earn and acquisition costs keep climbing.
Looking to improve your checkout experience? Explore PayPal checkout solutions and PayPal Pay Later flexible payment options to see how they can support conversion and customer choice.