What’s PayPal Recurring Payments? (Feb 2023)

Is This the Right Billing Solution for You?

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If you're looking for a way to create subscription plans for your products or services quickly, then it's well worth considering PayPal Recurring Payments. This is an excellent solution for developing, managing, and automatically processing subscription billing.
If you're on the fence on whether PayPal Recurring payments is the right platform for you, or if you want to know more about this solution, then continue reading to find out precisely that.
There's lots to cover, so let's dive in.

What's PayPal Recurring Payments?

PayPal Recurring Payments is an easy way for you to accept online credit and debit cards, PayPal, and e-wallet payments and manage automatic repeat billing. Most notably, via online invoicing, email, and website sales.

This makes PayPal Recurring Payments ideal for any entrepreneur with an online business that wants to bill customers for memberships, subscriptions, or repeat products and/or services. It's also worth bearing in mind that this service offers your customers a degree of flexibility, as you can offer partial payment plans.

If you're a busy business owner who's always on the run, you may also be happy to hear that PayPal has an app you can use. As such, you can manage your subscription billing whenever, wherever.

Please note that PayPal Recurring Payments doesn't accept e-checks or ACH payments at the time of writing.

PayPal homepage

How Much Will PayPal Recurring Payments Set You Back?

There aren't any monthly fees. Instead, you pay a recurring payment processing fee of 2.9% plus 30 cents per transaction.

For more info check out our full PayPal review.

The Pros and Cons of Using PayPal Recurring Payments

Let's start with the perks…

PayPal's Brand Name Carry's Some Weight  

PayPal is a widely used brand worldwide, which works wonders for instilling confidence in your shoppers. In fact, in terms of PayPalโ€™s brand recognition, it's 72% compared to other popular payment gateways whose recognition is below 50%.

Go Global

PayPal boasts 137 million active accounts from users across 193 countries. If you're looking to reach an international audience, this could well be an excellent choice for you. In fact, PayPal Recurring Payments empowers you to accept payments across 24 international currencies.

Monitor Your Transactions

PayPal Recurring Payments

With just a click, you can keep an eye on both your inbound and outbound transactions. You can also download your entire transaction history and pass this to your accountant when tax season comes around.

The Drawbacks

Now for the disadvantages of using PayPal Recurring Payments:

There Are Strict Rules You Need to Follow

Since as long ago as September 2011, PayPal's rules have become increasingly strict to protect against fraud. Consequently, any slight change in your average transaction value can result in your account being frozen and your money locked in, so you're unable to access it. Lots of PayPal users complain that PayPal rarely provides an explanation as to why the account has been frozen, or worse yet, closed – and merchants can't appeal the decision, so they just have to lump it!

Lousy Customer Service

Having read the point above, it probably isn't a surprise that PayPal's customer service doesn't fare too well. Some users complain about having to jump through hoops to speak to a real-life customer support rep, rather than a bot, an FAQ page, or a generic email.

PayPal's Verification Process is Long

Although setting up a PayPal business account is relatively easy, having your account โ€œverifiedโ€ can struggle a hassle. Now and then, PayPal requires extra documentation to verify your account. Most notably, utility bills and government-issues.

How to Set Up PayPal Recurring Payments

First things first, you'll need to ensure that you have a PayPal business account. Once you've set this up, be sure to have your username and password to hand. You'll also need access to your websiteโ€™s HTML code.
Now, follow the steps below to create your first subscription plan using PayPal Recurring Payments (this should take your roughly 15 mins per plan). 
  1. If you haven't already, create a PayPal account (A business one)
  2. Log into your PayPal Business account.
  3. Head to the ‘Manage Subscriptions' page, and then click ‘Create Plan.'
  4. Provide a few details about the products or services included in the plan, most notably, its name, a brief description of what's included, and your product ID.
  5. You'll then need to select the product type (physical goods, digital goods, or service), and pick the industry category that best describes your business.
  6. In a separate tab, head to your subscription plan's sales page, copy, and paste this into the fields that say ‘Product Page URL.'
  7. Now, click ‘Next.'
  8. Next, pick whether you want to opt for fixed pricing or quantity pricing, then when you're ready, click ‘Next.' Please note that: Based on your customer's chosen subscription plan, ‘fixed pricing' charges the customer's the same each billing cycle. Whereas, ‘quantity pricing' charges the customer's the same each billing cycle depending on their chosen quantity.  
  9. It's now time to create a plan name (this is visible to your customers) and description (this is your own reference; your customers can't see this). When you're done, click ‘Next.' 
  10.  Next, you need to set the price of your subscription plan. This involves selecting your desired currency, price, disclosing whether you charge a one-time set-up fee (optional), and selling how you'll calculate tax for the plan. You'll then need to enter your tax rate and select ‘Next' when you're finished.
  11. This next step involves selecting your billing cycle for your subscription plan – i.e., how frequently you'll charge your subscribers – daily, weekly, monthly, yearly, etc. You'll also have to specify the plan's length and the number of payments necessary for PayPal to stop attempting to take charge.  At this point, you can even say whether you offer a trial period (optional). Then, when you're finished, click ‘Next.' 
  12. Last but not least, you're ready to confirm your subscription plan's details and then hit ‘Save Plan' when you're happy and ensure youโ€™re ready toTurn on Plan.'
  13. At this point, you can now add a subscription payment button to your website.

Alternatives to PayPal Recurring Payments

If you don't fancy launching a PayPal subscription model, never fear, there are plenty of reputable alternatives, most notably:

Square Recurring Payments

square - paypal recurring payments alternative

Similar to PayPal Recurring Payments, Square makes it easy to manage your customer's recurring bills. Rest assured, you're in safe hands, in just one month Square processed over 600,000 invoices. Impressive, right?!

With Square Recurring Payments, you can handle recurring billing one of two ways:

  1. You can send recurring invoices to customers who have a debit or credit card on file: This is great for taking automatic payments for a set figure every billing period. For instance, if you're running a monthly subscription service, this could be the perfect option for you.
  2. You can send stand-alone invoices for card-on-file payments: This is ideal for invoicing repeat customers for varying amounts between billing cycles.

The Pros ๐Ÿ‘

  • It's simple to set up.
  • Square's pricing is pretty straightforward.
  • Square is a recognizable and trustworthy brand, which is great for boosting credibility with your audience.
  • Square's easy to use.
  • Square's reporting functionality is pretty simple to navigate

The Cons ๐Ÿ‘Ž

  • One user said they'd like to see more flexible categorization in Square's sales reports.
  • One Square customer said they'd like to see more options for freelancers
  • Square' onboarding experience could be more hands-on


chargebee - paypal recurring payments alternative

Whatever your billing agreement with your customers, Chargebee makes it simple to take usage-based, one-time, and regular payments. With Chargebee, it's entirely up to you how you process payments; you enjoy a huge amount of freedom when it comes to implementing the billing system that best meets your business needs.

The Pros ๐Ÿ‘

  • You get access to Chargebee's API, so if you have the coding smarts you can dive deep into the platform's customization.
  • You can process a wide variety of payment methods (including PayPal Express Checkout, Apple Pay via Stripe and Braintree, cards, Amazon Payments, etc.)
  • It's easy to offer customers a free trial
  • Chargebee's coupon feature is pretty sophisticated
  • There's a template you can use to encourage subscribers to update their card details

The Cons ๐Ÿ‘Ž

  • Chargebee's interface isn't mobile-optimized
  • You can't customize the Chargebee dashboard
  • Chargebee is certainly on the pricier side
  • One user said they'd like to be able to customize their invoices more


recurly - paypal recurring payments alternative

Recurly is another recurring billing platform well worth considering. If you're based in the US, Recurly is its own payment gateway and comes with a built-in virtual terminal, which enables you to process credit card information over the phone.

The Pros ๐Ÿ‘

  • Recurly is pretty intuitive to use and incredibly versatile.
  • Their customer service is excellent.
  • Recurly's dunning system is second to none.
  • Recurly makes invoicing easy.

The Cons ๐Ÿ‘Ž

  • You can't refund transactions older than six months.
  • You can't include usernames in the reports you generate.
  • Recurly's role/permission system could be more granular.

Braintree Recurring Payments

braintree - paypal recurring payments alternative

Founded in Chicago back in 2007 by Bryan Johnson, Braintree was bought by PayPal in 2015. Braintree offers an impressive array of customer payment types and enables you to receive funds from over 130 currencies.

The Pros ๐Ÿ‘

  • Integrates with lots of third-party shopping carts
  • Instantly verify customersโ€™ bank account information.
  • Braintree supports a wide array of payment options.
  • Braintree's level of security is excellent.
  • You'll enjoy predictable flat-rate pricing.
  • There are plenty of developer tools available.

The Cons ๐Ÿ‘Ž

  • Braintree isn't an option if you're operating in a high-risk industry.
  • Some users report having their accounts closed accounts and funds withheld with little (if any) warning.
  • Some of the customer service reps lack the knowledge and/or skills to provide adequate assistance.

Are You Ready to Start Using PayPal Recurring Payments?

If, having read this review, you think PayPal Recurring Payments could be right for your subscription-based business, then let us know how you get on in the comments box below. Or, will you opt for one of the alternative payment solutions listed above, either way, we'd love to hear from you!

Rosie Greaves

Rosie Greaves is a professional content strategist who specializes in all things digital marketing, B2B, and lifestyle. She has over three years of experience crafting high-quality content. Check out her website Blog with Rosie for more information.

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