Managed 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.

Overview

Before you get started with the Managed path integration, look at an end-to-end transaction flow example 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 order

Here’s an example of how you can create and pay for an order. To customize your money flow, you can indicate whether you want to include a partner fee, hold funds from your customers and disburse them on a schedule, or move funds directly from the customer to the merchant.

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

  2. 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.

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

  4. PayPal waits for your instructions through an API call to release the funds to the merchant. The funds move from the partner’s PayPal account to the merchant’s bank or PayPal account.

  5. PayPal disburses the funds to the merchant’s bank, from which the funds can be withdrawn to the merchant’s bank.

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, sometimes transactions must be refunded.

  1. As the partner and marketplace operator, you can initiate a refund by using the Payments API refund or a payment capture refund. A merchant can also initiate this refund on the merchant’s dashboard.

  2. Because you own loss liability, a loss account is required and configured to facilitate reverse movement of funds. PayPal reverses the transaction from your loss account.

  3. PayPal also reverses the variable portion of the PayPal processing fee. Any fixed fees or other overages are charged to the loss account.

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

Manage risk with holds

Marketplaces are closed loop networks held together by mutual trust. As the partner, you have the responsibility to ensure the best customer experience for both customers and merchants. PayPal allows you to hold funds, which we refer to as marketplace-directed holds. This provides a way of managing trust and safety.

Here’s how it works:

  1. Decide, on a transaction basis, if you’d like to delay the movement of funds between your customers and merchants. This could give you time to conduct additional vetting or enforce other marketplace-specific business logic.

  2. Specify that you want to delay the disbursement of funds.

  3. When conditions to release funds are met, disburse the funds.

Managed path integration steps

1. Sign up for a PayPal Business account at paypal.com.
2. Register your marketplace and create a PayPal app
Reach out to your PayPal account manager or contact us.
3. Onboard your merchants. The onboarding process is mobile responsive.
See the Managed 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.