What are the differences between the Express Checkout payment actions?
Use the Authorization option to place a hold on funds. When you submit an authorization, you're asking PayPal to check whether the funds are available, and if they are, to hold them for 72 hours. You have up to 29 days to capture an authorization, and when you do, the funds are held for three days only. The first 72 hours of the 29-day period are known as the "honor period," meaning that PayPal guarantees the funds' availability.
- Most three-day holds occur for ACH transactions, such as a debit card, but this depends on the card-issuing bank. In some cases, PayPal waives the three-day hold. In other cases, the hold on the card may continue for up to 30 days, or until the next billing cycle.
- If you decide to capture the funds within the last three days of the 29-day period, PayPal holds those funds until the end of the 29th day instead of the usual three days.
- You can capture less than the original authorization amount, the full amount, or up to 115 percent of (or $75 more than) the original authorization, whichever is less.
Here's an example of using the Authorization option:
- On Monday, a buyer goes to your site to shop.
- She adds the item you have in stock to her cart, and checks out via PayPal Express Checkout.
- The PaymentAction field in both the SetExpressCheckout and DoExpressCheckoutPayment API calls is set to Authorization.
- You get back an Authorization ID, indicating that the transaction succeeded and you have up to 29 days to capture the Authorization ID.
- On Wednesday, you plan to ship the product, so you first capture the payment with a DoCapture API call.
- You send PayPal the amount you want to capture and the Authorization ID. Because you're in the "honor period," the actual money moves from the buyer's funding source to your PayPal account.
- You see the Success response and then send the item.
You can use the Order option when you do or don't have all the items from the buyer's cart in stock or readily available. As with an authorization, an order is valid for 29 days, but the main difference is that the order doesn't place a hold on the funds. Instead, it lets you place a hold via an authorization at a later time.
- Using an Order has the advantage of not placing funds on hold for a period of time (depending on the issuing bank).
- In some cases you may not want to hold funds on your customers' credit cards, as you may not be shipping the item for a longer period.
- By default, the valid period for an Order is 29 days. To extend this period, you must contact PayPal Business Support or your Account Manager. To get the Business Support phone number, log in to your PayPal account and click Contact Us.
Here's an example of using the Order option:
- A buyer comes to your site, adds two items to his cart, and checks out via PayPal Express Checkout.
- Item A has a price of $15 and is currently in stock.
- Item B has a price of $25 and is on back order for three weeks.
- The buyer goes through the payment process and sets up an order for $40.
- The PaymentAction field in both the SetExpressCheckout and DoExpressCheckoutPayment API calls is set to Order.
- Because Item A is in stock, you process that part of the order by doing a $15 authorization before shipping Item A the next day. When you run DoAuthorization on the order for $15, you place that amount on hold. Before it ships the following day, you'd capture that Authorization ID for $15.
- Three weeks later, Item B is in stock. You begin processing the rest of the order by running a DoAuthorization for $25 and placing that amount on hold.
- If the authorization succeeds, you continue internal processing of the order by capturing the payment before shipping Item B the next day.
- If the authorization fails, the funds are unavailable from the buyer's funding source selected through PayPal. You must contact the buyer to resolve the issue.
- The Order is closed after the $40 is captured. Because an Order holds no funds, you don't have to worry about the customer calling you about a hold if you capture less than the Order amount.
Note: To do multiple Authorizations per Order, contact your Account Manager or PayPal Business Support to apply for this feature. To get the Business Support phone number, log in to your PayPal account and click Contact Us.
With the Sale option, PayPal processes the payment without holding funds. The funds transfer from the buyer's funding source to your PayPal account balance immediately.
- You can use the Sale option for something that's delivered quickly, such as Digital Goods or a product that ships as soon as you receive the order.
- PayPal immediately pulls the funds from the buyer's funding source and sends them to your PayPal account balance.
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