If you`ve been using PayPal to make and receive payments, you may have come across the term “billing agreement.” But what is a billing agreement with PayPal, and how does it work?
A billing agreement with PayPal is a contract between a merchant and a customer that allows the merchant to automatically charge the customer`s PayPal account for recurring payments. Basically, it`s a way for merchants to set up subscription or recurring payment plans with their customers.
Here`s how it works: the merchant (seller) will send a request to the customer (buyer), asking for permission to charge their PayPal account on a recurring basis. If the customer agrees, they will be prompted to log in to their PayPal account and confirm the billing agreement.
Once the billing agreement is in place, the merchant can automatically charge the customer`s PayPal account on a regular schedule, such as weekly, monthly, or annually. The customer will receive a notification each time a payment is made, and can cancel the billing agreement at any time through their PayPal account.
Billing agreements are a convenient way for merchants to collect recurring payments and for customers to manage their payments without having to manually send payments each time. They`re commonly used for services like subscription boxes, membership sites, and software or app subscriptions.
It`s important to note that billing agreements are different from one-time payments made through PayPal. One-time payments are initiated by the customer and require action on their part each time a payment is made, while billing agreements allow for automatic payments on a recurring basis.
Overall, a billing agreement with PayPal is a useful tool for merchants and customers alike, streamlining the process of recurring payments and making it easier to manage ongoing financial commitments.