Best Practices for Prompt Engineering

Effective prompt engineering is the foundation for leveraging AI agents in transformative ways. Whether you're creating invoices, managing transactions, or resolving disputes, crafting impactful prompts ensures you maximize the potential of PayPal AI tools. Below, we’ve outlined some best practices to help you unlock the true power of AI, and invite you to dive deeper into the resources available at PayPal’s Prompt Best Practices.

1. Be Clear About Actions and Parameters

Clarity in your prompts is key. Start with the action you want the agent to perform (“Create an invoice,” “Cancel a subscription”), followed by the specific parameter values in the order the tool expects. For instance, when generating an invoice, specify fields such as currency, invoice_id, and payment details upfront to avoid missteps. Well-structured prompts empower AI agents to execute tasks seamlessly.

2. Get Specific

Precision matters. Ambiguity in input leads to incomplete or failed outputs. Defining every required field in your prompts ensures accuracy, whether you're creating a QR-coded invoice or reconciling a transaction. Specificity eliminates guesswork and enables the agent to deliver consistently high-quality results.

3. Break Down Complex Tasks

Complex workflows often consist of multiple subtasks. Simplify them. For example, a checkout sequence might involve: 

1. Create order 
2. Pay order 
3. Create shipment

This modular approach makes solutions more manageable for AI agents, improving task accuracy and efficiency.

4. Encourage Step-by-Step Thinking

Prompts like “Think step-by-step before calling the tool” foster deliberate, analytical reasoning in agents. This best practice helps prevent errors, particularly in intricate tasks like evaluating disputes or reconciling transactions.

5. Protect Personal Information

Never include sensitive data in prompts. Avoid card numbers, SSNs, passwords, or any personally identifiable information to ensure compliance with Payment Card Industry Data Security Standards (PCI DSS). PayPal’s agent toolkit is designed to reject such data for security and privacy reasons.   

Explore PayPal AI’s Prompt Best Practices to master these techniques. With practical examples like subscription management, invoice creation, and error resolution, these strategies help developers and businesses redefine efficiency in agentic workflows.