PayPal Checkout

Alternative Payment Methods

Alternative payment methods allow customers across the globe to pay with their bank accounts, wallets, and other local payment methods. They are automatically presented with Smart Payment Buttons.

For example, a customer in the Netherlands might want to pay using iDEAL, which is used by more than half of consumers in the Netherlands for online purchases, whereas a customer in Belgium on the same website might want to pay using Bancontact, a popular payment method there.

Availability

Alternative payment method Buyer country Customer transaction limit
Bancontact Belgium n/a
eps Austria Minimum: 1.00 EUR
giropay Germany Minimum: 1.00 EUR
iDEAL The Netherlands n/a
MyBank Italy n/a
Przelewy24 (P24) Poland Minimum: 1 PLN
Maximum: 55,000 PLN
Sofort Austria, Belgium, Germany, Italy, the Netherlands, Spain Minimum: 1.00 EUR

Note: Alternative payment methods are not available to merchants in Brazil, Japan, and Russia. Not all alternative payment methods are available for merchants who sell specific prohibited goods and services.

By adding funding sources to your Checkout integration, you agree to the PayPal Alternative Payment Methods Agreement. This is in addition to the User Agreement applicable to the country in which your business is domiciled.

Currently, there is no support for cross-border shipping. Buyers receive a message that the shipping address is invalid when attempting to ship to a country where the alternative payment method isn't relevant.

How alternative payment methods work

Alternative payment methods diagram

  1. Buyer clicks an alternative payment button.
  2. Buyer provides their personal details.
  3. Buyer is transferred from PayPal to the alternative payments provider (bank, wallet) to confirm the purchase.
  4. Buyer authorizes and confirms payment.
  5. Buyer returns to the merchant page to finalize the transaction.
  6. Merchant initiates completion of payment. PayPal moves the funds to the merchant.

In step 4 of the flow diagram, once the buyer has authorized the payment and received confirmation from the alternative payments provider of payment success, the buyer might close their browser, instead of following the redirect back to the merchant’s page. Therefore, it is essential that the merchant enables webhooks to trigger transaction completion.

How alternative payment transactions appear in your PayPal account

Alternative payments transactions display as PayPal transactions in your PayPal account. There is no difference between alternative payment transactions and PayPal transactions and you can issue refunds for these transactions.

Accept alternative payment methods on your website

Alternative payment methods are enabled by default in the Smart Payment Buttons integration and they display within the iframe based on buyer eligibility, as long as the following integration defaults are maintained:

Parameter Value Description
style.layout vertical Default. Buttons are stacked vertically with a maximum of four buttons. Recommended when:
  • Presenting a dynamic list of payment options on checkout and shopping cart pages.
  • Leveraging PayPal Checkout as a full stack payments platform.
intent capture The funds are captured immediately, while the buyer is present on your site.
commit true Show a Pay Now button in the PayPal Checkout flow. The final amount will not change after the buyer returns from PayPal to your site.
vault false Show all funding sources.

Note: There is no support for authorization and capture later, subscriptions, vaulting, or shipping changes callback scenarios.

Ensure that the total amount at the time of making the create order call equals the amount when capturing the payment.

Next you'll configure a webhook and test and go live.

1. Configure the alternative payment method webhook

Alternative payment methods involve buyers going to their bank or wallet's app or website, completing the payment, and then returning to the merchant's website to complete the checkout flow.

Important: To boost conversion rates of alternative payment transactions, listen to the CHECKOUT.ORDER.APPROVED webhook and then capture the order.

There's a possibility that a buyer might not return to the merchant's website after successfully completing the payment on their bank or wallet's app or website. In such a case, you can complete your checkout flow without the buyer returning to your app or website by configuring a webhook listener for the CHECKOUT.ORDER.APPROVED event. Use the information returned in the webhook to make the capture order call.

If you are unable to complete the transaction within three hours of invoking the checkout flow, PayPal automatically refunds the money to the buyer.

2. Test and go live

You can test the alternative payment methods on the PayPal sandbox. The alternative payment methods are dynamically presented based on the buyer's country. Use the buyer-country parameter to display the appropriate alternative payment method button. Refer to the availability table to see which countries support the payment methods you want to test. Once you initiate the payment by clicking on an alternative payment method, you are directed to the buyer experience.

Note: The alternative payment flow is simulated in sandbox and doesn't reflect what is shown in production.

To launch alternative payment methods into production, swap your sandbox credentials for your production credentials.

Disable alternative payment methods

To disable alternative payment methods, see disable funding in the Customize the PayPal JavaScript SDK Script guide.

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