Payment failures and recovering balances

DocsCurrentLast updated: June 20th 2023, @ 12:08:42 pm

You can set payment failure thresholds for subscription plans and capture the outstanding balance for a subscription.

Payment failures

When a subscription exceeds the payment failure threshold:

  • The subscription is suspended.
  • If a payment fails, PayPal retries the payment every 5 days. PayPal retries the payment up to twice per billing cycle.
  • If the second retry fails, PayPal counts this as a payment failure. The failed payment amount is added to the outstanding balance for the next billing cycle.

When you create your plan, you can set the value for the payment_failure_threshold in the payment_preferences object:

    "payment_preferences": {
        "auto_bill_outstanding": true,
        "payment_failure_threshold": 2

Example of payment failure threshold

The following example describes a payment failure threshold where:

  • A streaming service costs $10 per month
  • The payment failure threshold is set to 2
  • A subscriber pays on January 1 and is billed on the first of every month at 10:00 AM GMT.

In this example, PayPal can't pull funds from the subscriber on February 1. Paypal retries on February 5 and February 10. No funds are pulled. PayPal counts this as a payment failure. The outstanding amount against the subscription is $10.

$10 is added to the next billing cycle, so the subscriber is charged $20 on March 1. PayPal can't pull funds and reaches the payment failure threshold. The subscription is suspended.

The subscriber cancels the subscription with a $20 outstanding balance. PayPal stops retrying attempts for failed payments. You can settle offline or capture the payment.

Recover outstanding balance

If the subscription has an outstanding balance, you can capture the balance. You can do this if the failure threshold is met and the subscription is suspended.

Sample request

In this example, the outstanding balance being captured is $20. You could also capture $10 of the balance now and the remaining $10 later.

1curl -v -X POST
2-H "PayPal-Auth-Assertion: AUTH-ASSERTION"
3-H "Content-Type: application/json"
4-H "Authorization: Bearer ACCESS-TOKEN"
5-H "PayPal-Request-Id: CAPTURE-160919-A0051"
6-d '{
7 "note": "Charging because the balance reached the limit",
8 "capture_type": "OUTSTANDING_BALANCE",
9 "amount": {
10 "value": "20.00",
11 "currency_code": "USD"
12 }
13 }'