PayPal Billing Agreements

OK, so maybe I’m missing something here and I wanted some community input.

I see more and more providers ditching Subscriptions in favor of Billing Agreements, and some even going as far as completely disabling even the one time payments and only allowing Billing Agreements (ie: vultr).

Now, of course the Billing Agreement is much more flexible and convenient than a set-in-stone subscription… however I don’t feel at all comfortable allowing a provider to charge my PayPal at any time, at will.

Looking at recent incidents where providers charged PayPal accounts all of a sudden, and looking at incidents such as the one where Quadix won a PayPal dispute by providing false invoices to PayPal… it’s a somewhat worrying factor for me.

You’ve got to remember that PayPal is not a bank institution, so it’s not as easy as you going to your bank and filing a credit card chargeback. If the provider charges your PayPal ballance, and not your card, then PayPal will be the sole deciding entity in the outcome, and as we’ve seen they can rule in the wrong direction.

So, am I missing something here?

It would be great if PayPal would allow you to set limits for each Billing Agreement, so it can’t charge more than $X every month.


You’re not, it’s pretty insane.

I’m not trusting a vendor with a pre-authorization - especially not a small time host.

I pay all of my bills manually & it’s never screwed me over - the same can’t be said for my friends who’ve signed debit orders/etc.


What? No. I like wasting my time paying the bills every month.

I don’t know about you, but if I’m being forced to choose, I’ll go with spending an extra 30 minutes per month manually paying some bills, rather than the possibly of losing hundreds or thousands of dollars.

But overall I tend to stay far away from providers that shove only Billing Agreements down your throat. Currently only using 3 such providers, which I sort of need to use, and even so only 1 of thse 3 has constant access to be able to charge the PayPal account; the other 2 I just log in every few months, add in few hundred dollars in credits and immediately cancel the Billing Agreement right after.

Don’t get me wrong though, I’m not debating the efficiency and comodity of having Billing Agreements, I’m debating their safety and security.

Were are you located?
In europe evey fk’ing company wants to do this… not thru PayPal but thru the bank, I can tell you that there’s no shortage of companies making headlines due to “friendly mistakes that never happened before” yet keep happening.

Even the gym I go to wants to do this, I told them I have no bank account…

I have a friend that works at a quite large company (listed in the stock market), and he once told me that there’s always an “error margin” in the invoices and that the company did studies that show that the large majority of their client won’t even notice it. YET, if they are to pay the invoices manually then the margin of clients that notices the invoices error grows exponentially. See where I’m going with this?..

Giving me the option? ok… no but thanks.
Forcing me? hell no!

I don’t think I’d mind doing this. I’d only be hosting data at companies I trust in the first place, so if you think your provider is going to scam you with extra charges I wouldn’t recommend using them in the first place. If my datacenter wants to adjust pricing for overages or anything else, I wouldn’t mind it all being automated. Saves me time.

I have been using Billing Agreements for over a year with Catalyst and it has been great. No more issues with people forgetting to cancel subscriptions. It makes the PayPal account basically act like a credit card, so can bill when invoice is due.

That was my first instinct as well, but then I quickly realised it’s not always true… I do have providers where I don’t host important data, or where I don’t host data at all (ie: licenses).

Except, as I’ve mentioned above, they’re not like a credit card, since a dispute for PayPal ballance may not go your way, even if you’re in the right.

No doubt, disputes will always go one way or the other. We have had disputes for subscriptions not go in our favor. So far all disputes for billing agreements have gone in my favor, however as mentioned it depends on the dispute. So I am sure I will get one that doesn’t go in my favor. From a management perspective it’s a whole lot better.

I have been waiting for approval for reference transactions for a month. Man damn PayPal guys were not aware or what references are. I don’t know what else to say or do. We had a single dispute in 2 years we had the PayPal account.

In my experience PayPal support is utterly useless. I requested a downgrade from a business account to a personal one.

They wanted a ton of documentation, saying my account has a red flag on it - weird, I never had a dispute and the account is over 8 years old, but I wanted to get it done so I agreed to it. They sent me instructions and links for the old UI, so naturally nothing worked and I spent like 15 minutes digging through the PayPal client area to find the upload documents form.

I sent all requested documents and informed them. It’s been around a month and no response from their side.

How can a banking institution be so unreliable is beyond my comprehension.

That’s just it. At least in the US, they aren’t a bank, so they don’t have to do any of the normal bank stuff. Although, even if they were a bank, I’m not sure it would be much different.

Sure? all Providers I use, accept a single paypal payment.

The only thing which reminds me is Steam but you can disable that on checkout

Gotta confess, I don’t know what that is.
What’s that?

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^, basically. This allows you to have billing agreements, which is useful for our business. Really need it, subscriptions have messed things up a lot. We’d rather just use the agreements due to the amount of upgrades we do per week. Plus, no more issues with subscriptions applied twice and such. Huh.

But anyway, PayPal’s support in Portugal is terrific, they weren’t aware of Reference Transactions, then escalated to a higher up who said only major companies can have it, like Netflix, etc… Wtf? Do we have to move to the USA? We have hundreds of clients with a single dispute from a fraudster. It’s been a month and no news yet. I’ll call them tomorrow most likely and let them know we’re considering switching providers.

If you already use Braintree for CC, you can add your PayPal to Braintree and use their APIs for billing agreements. Works without approval from PayPal and they have better APIs.:slight_smile:

You can’t really switch… and they know it. I wouldn’t threaten them cause you take the risk of creating some bad will towards you.

That said, it’s easy to create an US corp, Stripe does it for you for like $500.

Basic subscriptions allow you to increase the fee by up to 20% at a time. Maybe that helps?

Nah. Not at all…