DocsCurrentLast updated: June 20th 2023, @ 12:08:42 pm
You can set payment failure thresholds for subscription plans and capture the outstanding balance for a subscription.
Payment failures
When a subscription exceeds the payment failure threshold:
- The subscription is suspended.
- If a payment fails, PayPal retries the payment every 5 days. PayPal retries the payment up to twice per billing cycle.
- If the second retry fails, PayPal counts this as a payment failure. The failed payment amount is added to the outstanding balance for the next billing cycle.
When you create your plan, you can set the value for the payment_failure_threshold in the payment_preferences object:
"payment_preferences": { "auto_bill_outstanding": true, "payment_failure_threshold": 2 }
Example of payment failure threshold
The following example describes a payment failure threshold where:
- A streaming service costs $10 per month
- The payment failure threshold is set to
2 - A subscriber pays on January 1 and is billed on the first of every month at 10:00 AM GMT.
In this example, PayPal can't pull funds from the subscriber on February 1. Paypal retries on February 5 and February 10. No funds are pulled. PayPal counts this as a payment failure. The outstanding amount against the subscription is $10.
$10 is added to the next billing cycle, so the subscriber is charged $20 on March 1. PayPal can't pull funds and reaches the payment failure threshold. The subscription is suspended.
The subscriber cancels the subscription with a $20 outstanding balance. PayPal stops retrying attempts for failed payments. You can settle offline or capture the payment.
Recover outstanding balance
If the subscription has an outstanding balance, you can capture the balance. You can do this if the failure threshold is met and the subscription is suspended.
Sample request
In this example, the outstanding balance being captured is $20. You could also capture $10 of the balance now and the remaining $10 later.
1curl -v -X POST https://api-m.sandbox.paypal.com/v1/billing/subscriptions/I-BW452GLLEP1G/capture
2-H "Content-Type: application/json"
3-H "Authorization: Bearer ACCESS-TOKEN"
4-H "PayPal-Request-Id: CAPTURE-160919-A0051"
5-d '{
6 "note": "Charging because the balance reached the limit",
7 "capture_type": "OUTSTANDING_BALANCE",
8 "amount": {
9 "value": "20.00",
10 "currency_code": "USD"
11 }
12 }'
FAQs
Failed Payment Process
All the information needs to be authorized and verified by the customer's bank. The amount is transferred to the acquiring (merchant's) bank, and only then to the merchant's account. If there is an issue with any one of these steps, including insufficient funds, the payment fails.
What happens if PayPal cannot recover funds? ›
If you don't resolve the negative balance within 120 days, your account will be locked, and you won't be able to log in.
Why do my payments keep failing? ›
Types of credit card payment failures
Soft declines – Card declined due to issues with transaction processing. The bank issuing funds approves the payment, but the transaction breaks down during the processing stages. Hard declines – Card declined by the bank due to lack of funds or outdated card information.
What happens if my PayPal payment fails? ›
If a payment fails, PayPal retries the payment every 5 days. PayPal retries the payment up to twice per billing cycle. If the second retry fails, PayPal counts this as a payment failure. The failed payment amount is added to the outstanding balance for the next billing cycle.
What to do if payment failed but amount debited? ›
To request a refund, contact the merchant. If money has debited from your account but the merchant says they didn't receive the credit or refund, contact your bank to file a chargeback. You can file a chargeback on the bank's official website or by visiting the physical bank branch.
Where does money go when a transaction fails? ›
In most cases, if the transaction has failed with the merchant, the money will be reversed to you automatically within 5-7 days and won't be billed to you. In case it gets settled and you were denied services, you can claim a chargeback with our customer support team.
How long does a failed payment take to return PayPal? ›
Once issued, refunds usually take up to 5 working days to complete. Some refunds may take up to thirty days, depending on the status of the payment at the time the refund was issued. For example, if a payment was still 'Pending' at the time of refund, the longer timeframe is most likely, depending on the bank involved.
What will PayPal do about negative balance? ›
If your PayPal account balance is negative for an extended period of time, we may pass this debt to a collection agency. The debt collection agency may contact you on our behalf. They'll ask you to repay the amount owed, while providing you with a range of payment options.
How to sue PayPal for holding funds? ›
You have to sue them in District Court. Small claims magistrates have no jurisdiction over that company. You should also carefully read over PayPal's Terms of Service - it contains an arbitration clause, which means if you do sue them, they may kick the case out of court into arbitration.
Why is my payment failing repeatedly? ›
Failures of online payments are caused by additional factors
Expiration or cancellation of a credit or debit card. An invalid billing address has been entered. Cardholder's account was flagged by the bank. Credit card debt has reached the limit of the customer's card.
Confirm that the payment method you're trying to add:
- Is available in your country.
- Has a CVV code. It's either a 3-digit code on the back of your card or a 4-digit code on the front. ...
- Isn't associated with too many accounts. To keep your information safe, we limit the number of accounts a payment method can be used on.
If you miss a series of regular payments to lenders they may record a default on your report. This can significantly lower your credit score for up to six years. Borrowing more than you can afford. If you can't pay off your debts, you may have to get a Debt Relief Order or Individual Voluntary Arrangement.
What happens if PayPal Pay in 4 payment fails? ›
If that occurs, you may receive an automated phone call and/or other communication, reminding you of your past due balance and informing you of how you can make your repayment. Missed repayments also may impact future eligibility for Pay Later products.
Will PayPal try again if insufficient funds? ›
If there's insufficient money in your bank account or your bank declines the transaction when we attempt to complete the eCheck payment, we'll try again within 3 business days. If the payment is declined a second time, we'll cancel it. Remember, your bank may charge a fee for declined payments.
Will PayPal reverse payment? ›
When we receive a bank reversal request, we open an investigation and may request additional information from both the buyer and seller. If our investigation finds the transaction was fraudulent, it will be reversed. Otherwise, it will be completed.
What happens if you fail to make a payment? ›
You may incur a late payment fee, penalty interest rate and risk damage to your credit score.
What does it mean when a payment status fails? ›
Insufficient Funds: Usually, payments fail simply because the customer does not have the required funds available in their account to cover the transaction – or because they have exceeded their credit limit. In either case, their bank will typically reject the payment.
How long does it take for a failed payment to bounce back? ›
Bank transfers can bounce back if there's an error with the account details or if there's insufficient funds. Sometimes, banks will not allow you to make the transfer in the first place but other times, the money might move out of your account and then return within a few working days.
