User Agreement - PayPal Payment Agreement for Pre-approved Payments

>> View all legal agreements

PayPal Recurring Payments and Billing Agreement

Last Update: 27 July 2017



This Recurring Payments and Billing Agreement is effective until 4 April 2018. A revised Recurring Payments and Billing Agreement will come into effect on 5 April 2018. Click here to review the revised Recurring Payments and Billing Agreement.

You accept this Recurring Payments and Billing Agreement when you sign up for a recurring payment with a third party without a PayPal account or when you accept our User Agreement. We may amend this agreement and provide you with 30 days’ prior notice by posting notice of the change on the “Policy Updates” page of our website. After this 30 day notice period, you will be considered as having expressly consented to all amendments to this agreement.

  1. Recurring Payments
    A Recurring Payment is a payment in which you (as a buyer or a sender of funds) provide an advance authorisation to a third party (such as a merchant or eBay) for a third party initiated payment, that is a charge to your PayPal account or credit or debit card where you do not have a PayPal account (“Nominated Payment Source”) directly on a one-time, regular, or sporadic basis. Recurring Payments are sometimes called “Subscriptions”, “Automatic Payments”, “Preapproved Payments” or “Future Payments”. By providing an advanced authorisation for a third party initiated payment, you are giving the third party the ability to collect or reverse variable payment amounts from your Nominated Payment Source until such time as this arrangement is cancelled.
  2. You hereby authorise and instruct PayPal to pay the third party (or another person they direct) amounts from your Nominated Payment Source for the amounts you agreed to owe and as presented to PayPal by that third party. You agree that PayPal is not obligated to verify or confirm the amount the third party presents to PayPal for the purpose of processing these types of payments. You acknowledge and agree that use of Recurring Payments in any form means that these payments may be variable and scheduled to occur at certain times (in the manner agreed between you and the third party). You should make sure that you fully understand your payment obligations with the third party and ensure you always have sufficient funds to meet your ongoing commitment to the third party.
  3. If your third party initiated payment requires a currency conversion by us, the amount of the currency conversion fee will be determined at the time the applicable third party processes your payment and completes the transaction. You acknowledge that the exchange rate determined at the time of each payment transaction will differ and you agree to the future execution of third party initiated payments being based on fluctuating exchange rates.
  4. In some cases, merchants may hold a small payment to verify your PayPal account. The hold is usually released within 3 to 5 days.
  5. Billing Agreement
    When you establish a Recurring Payment with a merchant, you are also entering into a Billing Agreement with PayPal. By entering into a Billing Agreement you are authorising PayPal to allow the merchant to charge your Nominated Payment Source directly. PayPal facilitates the transaction between you and the merchant, but does not enforce contractual obligations for payment by you or for delivery of goods or services by the merchant.
  6. Payment Method Selection for PayPal payments
    In most cases, when the merchant requests a payment from your PayPal account, PayPal will attempt to process the payment from an available Payment Method you choose when you establish the Recurring Payment.

    If the preferred Payment Method fails (for example, a credit or debit card expires) and your PayPal account cannot complete a transaction in the first instance, it may be used again to try to complete the transaction. If the preferred Payment Method in your PayPal account cannot complete a transaction after repeated attempts, each of the other payment methods available in your PayPal account may be used to try to complete the transaction in the following order: PayPal balance, bank account, debit card then credit card. You will have the ability to disable payment methods for your Recurring Payment, with the exception that if you have one or more credit or debit cards linked to your PayPal account, then at least one of those cards must be enabled for billing.
  7. Cancelling Recurring Payments
    Buyers or senders of funds may cancel a Recurring Payment at any time up to 3 business days prior to the date the payment is scheduled to take place. If a PayPal payment is funded by your bank account, then you may cancel this payment following notice of the payment to be made by contacting PayPal customer support via email or telephone.
    a. PayPal account
    You can cancel a Recurring Payment or a Future Payment established with a PayPal account by logging into your account and accessing the settings page. If you cancel a Recurring Payment you may still be liable to the merchant for the payment and be required to pay the merchant through alternative means.
    b. Guest checkout
    To cancel a Recurring Payment established directly with your nominated credit or debit card (i.e. without a PayPal account), you can cancel it by contacting the merchant or PayPal. PayPal can be contacted by:


    1800 073 263 (within Australia) or +61 2 8223 9500 
    6am - 10pm AEST/AEDT Monday to Friday 
    8am - 7pm Saturday and Sunday

    Not open on Christmas Day, Boxing Day or New Year’s Day.


    PayPal Australia 
    GPO Box 351 
    Sydney NSW 2001

  8. Merchant obligations
    Merchants who present PayPal with a payment request under a Billing Agreement warrant to PayPal that the amounts they present have been properly agreed and consented to by the customer whose Nominated Payment Source will be debited (including any applicable changes to those agreed amounts). Merchants also agree that they will notify their customers in advance of the amount they will collect (such advance notice must be reasonable for the customer, taking account of all the circumstances) if that amount has increased in such a manner that the customer could not have reasonably expected to pay such an amount, taking into account that customer’s previous spending patterns and the circumstances of the payment.
    Merchants must provide buyers with the ability to cancel a Recurring Payment within 3 business days of the scheduled date of the Recurring Payment.
  9. Enhanced Recurring Payments Policy for PayPal’s Website Payments Standard Customers
    This “Enhanced Recurring Payments” Policy applies for Website Standard Payments merchants who have enabled the “Enhanced Recurring Payments” feature and applies to your use of the Enhanced Recurring Payments feature offered with PayPal Website Payments Standard.
    The Enhanced Recurring Payments feature enables you to provide your customers with the ability to sign up for “Instalment Plans” and “Automatic Billing arrangements”.
    1. Instalment Plans.
      Instalment Plans allow you to offer your customer the ability to make a purchase from you and pay you in 4 or less instalments. If you use Instalment Plans, the following restrictions apply:
      1. You may not charge for the first payment of the instalment until you have shipped the goods purchased by your customer.
      2. You may not charge in more than four instalments for a purchase.
      3. You may not add finance charges to the payment amount.
      4. The sum of the instalment billing must not exceed the total purchase price of the goods, including applicable taxes and shipping costs, as applicable.
      5. You must have and retain your customer’s express consent to charge in instalments.
    2. Automatic Billing.
      The Automatic Billing functionality allows you, the merchant, to automatically charge your customers’ Nominated Payment Source on a regular basis in an amount which you and your customer have previously agreed. The payment you receive is called an “Automatic Payment”. If you use Automatic Billing or Recurring Payments, you must follow these requirements:
      1. Express Consent. You must receive your customer’s express consent for the amount, frequency, and duration of the Automatic Payment.
      2. Required Cancellation Procedures for Automatic Payments. You must provide the customer with the ability to cancel an Automatic Payment within 3 working days of the scheduled date of the Automatic Payment. In addition, if the customer signed up for the Automatic Payment through an online method, you must provide a simple and easily accessible online cancellation procedure. If your customer cancels the Automatic Payment, you may not charge for the Automatic Payment.
    3. Guest Checkout Availability for Instalment Plans, Automatic Billing, and Recurring Payments.
      With this functionality, you will be able to offer Instalment Plans, Automatic Billing, and Recurring Payments to all of your customers, instead of only those customers paying you through their PayPal account. Please note however that this functionality cannot be turned off.
    4. Termination.
      You may terminate your use of Website Payments Standard: Enhanced Recurring Payments at any time. Upon termination, your use of Website Payments Standard: Enhanced Recurring Payments will immediately end. PayPal reserves the right to terminate your usage of Website Payments Standard: Enhanced Recurring Payments if you breach the terms of this Policy or any other User Agreement and incorporated policies which you have accepted from PayPal.