Connected path

Important: PayPal for Marketplaces is available to select partners for approved use cases. For more information, reach out to your PayPal account manager or contact us:


Before you get started with the Connected path integration, look at an example of the end-to-end transaction flow to see how orders are created, paid for, and refunded. If you already have a good idea how this works, proceed to the integration steps.

Sample flows

Create an order

Here’s an example of how an order can be created and paid for. You can customize your money flow by deciding if you want to include a partner fee, and if you want funds from your customers to be held and disbursed on a schedule, or if you want funds to be moved directly from the customer to the merchant.

  1. A customer comes to your platform and makes a purchase.

  2. PayPal performs risk and compliance checks on the transaction and disburses the funds to the merchant’s PayPal account from which they can be withdrawn to the merchant’s bank or debit card.

  3. PayPal processes the charge to the customer, netting the PayPal processing fee while setting aside the partner fee from the funds due to the merchant. The PayPal fee includes both variable and fixed fees.

  4. PayPal settles the partner fee to the partner’s bank account.

  5. PayPal waits for your API call to release the funds to the merchant.

Note: For details on creating and paying for orders, see the Orders Integration Guide.

Refund an order

While most customers are satisfied with their purchases, there are times when transactions need to be refunded.

  1. Either you or your merchants can initiate a refund.

    • The partner can refund the order, or refund individual transactions by using the Refund API. As the partner, you can initiate a refund by using the Payments API through your dashboard.

    • Your merchants can initiate a refund by using the Refund button on their PayPal dashboard.

  2. PayPal reverses the transaction, including funds settled to the merchant and the partner fee.

  3. PayPal also reverses the variable portion of the PayPal processing fee. Any fixed fees or other overages are charged to the merchant’s account. If funds can’t be recovered from the merchant account, PayPal absorbs the loss.

The following example shows what happens when you reverse the transaction described in create an order.

Note: See the Orders Integration Guide for details on refunding payments.

Manage risk with holds

Marketplaces are closed loop networks held together by mutual trust. As the partner and/or marketplace operator, you have the responsibility to ensure the best customer experience for both customers and merchants. Holds provide a unique way of managing trust and safety because they allow you to hold and disburse funds on terms you set on a transaction-by-transaction basis.

Here’s how they work:

  • Decide whether to delay the disbursement of funds between your customers and merchants and set those specifications. For example, you might want a certain set of rules for new users to your platform and another set of rules for long-time customers and merchants.

  • When the conditions you specify are met, disburse the funds. We complete a final round of risk and compliance checks before settling funds to the merchant.

With flexible holds and disbursements, you have the opportunity to manage your reputation on your platform, while PayPal’s overall risk management protects you from loss liability.

Connected path integration steps

1. Sign up for a PayPal Business account at
Note: If the Partner has an existing PayPal Business Account that is being used for another PayPal Product, they cannot reuse that Business Account, but will need to create a new PayPal Business Account for this integration. The merchant will need to link a bank to their new PayPal Business Account as well.

2. Register your PayPal marketplace
Reach out to your PayPal account manager to get your Business Account configured for your integration or contact us.
3. Onboard your merchants. The onboarding process is mobile responsive.
See the Connected Onboarding Integration Guide.
4. Add PayPal to your checkout experience. See the Orders Integration Guide.
5. Manage disputes with the Marketplace Disputes Integration Guide.
6. Set up reporting. See the Reporting Setup Guide.