WooCommerce, which currently powers roughly 30% of online stores, has a growing catalogue of 355 extensions ranging from free to $249. Most of the major payment gateways are offered at $79 per single site license. There are also hundreds of additional extensions hosted on WordPress.org, including several payment gateway plugins that, if listed on the WooCommerce site, would be in direct competition to its major money makers.
PayPal for WooCommerce is one such competitor. It adds PayPal Express Checkout, Payments Pro, and PayPal Plus (for Germany) to WooCommerce in a single, completely free plugin. It also utilizes all of the features PayPal provides in its APIs for seamless integration with WooCommerce. The plugin is active on more than 10,000 sites and has a 4.8/5.0 star rating on WordPress.org.
Andrew Angell developed PayPal for WooCommerce after finding inadequacies in the leading plugin options at the time. Prior to creating the plugin, Angell spent many years becoming a PayPal specialist, earning much of his income taking PayPal-related development projects. He is now a PayPal Partner, certified PayPal developer, 3-time PayPal Star Developer award winner, and a PayPal Ambassador.
“I first started learning how to work with web services around the time PayPal had just released their first set of public APIs,” Angell said. “Payment processing was very important to my general web development work, of course, so I took the time to learn how to tightly integrate the PayPal API, which really taught me how to work with pretty much any API at that point. During this time I spent a lot of time in PayPal developer forums.”
As PayPal introduced a wide variety of different API products over the years, Angell was able to become familiar with them one at a time as they were released. He spent a good deal of time providing free support to people looking for help with PayPal development on StackOverflow, which led to a seemingly never-ending supply of PayPal-specific client work and eventually a partnership with PayPal that pays him a revenue share based on the volume of transactions processed through their platform.
“For a long time I was just another web developer that was using the PayPal forums as a way to generate work and prestige for the “angelleye” name,” Angell said. “The vast majority of the work that was coming to me was WordPress / WooCommerce type work where people wanted help getting PayPal working the way they want. My primary business model was to sell websites and custom jobs, and the PayPal revenue share was a nice little bonus on that.
“As a general developer/user myself, when I would get these jobs I was thinking, oh great, Woo provides premium extensions for Express Checkout, Payments Pro, etc,” Angell said. “I’ll just buy those and we’ll use those in these projects to keep the time/cost down for my client.
“As I started doing this, though, I quickly saw that while the Woo community builds a great shopping cart, they left much to be desired in the specific area of PayPal payment integration. Their plugins were missing lots of little features PayPal provides that are useful, and the error catching wasn’t done well, so successful payments could actually be flagged as failures, and other little things like that were just wrong. I found myself spending so much time extending/customizing their plugins that I just decided I needed to build my own. That’s how PayPal for WooCommerce was born,” he said.
Angell’s first official WordPress plugin was a success, thanks to the popularity of WooCommerce as well as PayPal’s 67% market share among payment gateways.
“Because many others were experiencing the same struggles I was with Woo’s extensions, it [PayPal for WooCommerce] quickly became popular on its own – enough that it completely changed my business model,” Angell said. “I am now entirely focused on building tools like this, giving them away for free, and generating as much volume as I can.”
Angell and his team are starting to play with the premium extension models that WooCommerce and many others use, but he said that PayPal for WooCommerce will always be completely free.
“Our PayPal IPN for WordPress and our Offers for WooCommerce, though, do have some premium extensions that we’ll be selling licenses for, and we’ll continue to build on that as well as maintaining our free stuff,” he said.
A Non-Traditional Way of Monetizing a Free WordPress Product
Traditionally, the WordPress freemium product business model creates revenue by selling commercial licenses and support. With payment gateways it’s a little different because revenue sharing offers a more lucrative business opportunity. In this scenario it’s best if the product is free, although it still requires updates, support, and a reputation for reliability.
Angell would not share with us his exact cut from the PayPal partnership program but said it’s only a fraction of a percent.
“I don’t have any way to see exactly what this one plugin generated for us, but I can tell you that the combination of all the tools we have processed a total of $207 million in 2015,” Angell said. “PayPal for WooCommerce is by far our most popular tool, but we do have about 10 other tools that are helping with those numbers as well.”
Maintaining a payment gateway by staying current with changes to the PayPal API is a ton of work. Add to that the burden of support for 10,000+ active installations, and WooCommerce for PayPal could be a full-time job. The revenue share business model makes supporting this free plugin worthwhile.
“The model is just nicer for me because I can simply support the product instead of having so many clients breathing down my neck with deadlines,” Angell said. “I simply make sure I respond quickly to people in the support forums and fix bugs in the plugins whenever necessary as quickly as possible.
“Because of the quality development and our expertise in ensuring PayPal is integrated well, we really don’t have a lot of issues keeping up with support. Most of the bug reports we get involve conflicts with other plugins, so as long as I make sure our stuff continues to work with new updates of WordPress and WooCommerce we can generally get through our days stress free,” he said.
“We have definitely thought about building similar extensions for other plugins like GravityForms, etc. but we’re still in growth stages here and aren’t working with a very big budget,” Angell said. “Only myself and one other developer are managing all of these tools right now, and that’s on top of all the client work we still have and do on a regular basis just because we didn’t want to kill relationships with good clients.”
Angell and his team also benefit from keeping PayPal for WooCommerce open source and freely available on GitHub, where they can receive contributions and bug reports for improvements. Since the business model doesn’t revolve around selling licenses and limiting the number of sites that can use them, there’s no need to keep the code locked up.
The model also works out well for the users, who receive a high quality plugin and support for free as opposed to paying $79 for a single license of PayPal Pro or $199 for up to 25 sites. PayPal for WooCommerce, on the other hand, can be used on an unlimited number of sites for free.
All this time, I was using the WooCommerce built in Paypal gateway. This article made me think twice how I should utilize Paypal with Woo.
Very nice article, thanks!