Pay upon invoice with Ratepay

Add PUI as a payment method

DocsLimited ReleaseLast updated: November 29th 2021, @ 2:54:27 pm

Pay upon Invoice is an invoice payment method in Germany. It is a local buy now, pay later payment method that allows the buyer to place an order, receive the goods, try them, verify they are in good order, and then pay the invoice within 30 days. There is no PayPal account needed for the buyer to use Pay upon Invoice.

PayPal has partnered with Ratepay to provide this service. This payment method is also called as Rechnungskauf mit Ratepay in German.


Important: When adding Pay upon Invoice with Ratepay/Rechnungskauf mit Ratepay as a payment option to your checkout integration, you must acknowledge and accept these Terms and understand they are part of the PayPal User Agreement.

Buyer Relevant CountriesMerchant Relevant CountriesPayment method typeMinimum amountMaximum amountRefunds
Germany (DE)Germany (DE)deferred payment5 EUR2500 EURWithin 180 days
  • This integration is available only in Germany to eligible merchants and partners.
  • Merchants: You must sell goods in the B2C model only.
  • Merchants: You must ship orders within seven days after the transaction.
  • Merchants: You must be approved to accept transactions using this payment method. PayPal will ask you to enter a valid VAT ID Number as per EU regulations. Without a valid VAT ID for your business, PayPal is required to collect additional VAT as applicable on PayPal fees. To enable Pay upon Invoice in the PayPal sandbox environment, use this to complete the setup for your Sandbox account. When you are ready to accept PUI transactions on the live environment, you can begin the approval process here for your live account.
  • Paying for digital or virtual goods, including but not limited to any form of vouchers, such as gift vouchers, gift cards, and cash codes, as well as any transactions outside of PayPal’s Acceptable Use Policy is not allowed with this payment method.
  • Partners: Be sure to onboard your merchants  before they accept payments (upfront). Onboarding after making payments, i.e. Progressive Onboarding, is not supported for Pay Upon Invoice with Ratepay.

How it works

PayPal facilitates the interaction between you and Ratepay:

  1. PayPal sends the buyer information to Ratepay for risk assessment. Depending on the result, Ratepay will send the buyer payment instructions or a rejection notice.
  2. You are funded immediately when the buyer successfully completes the checkout process with the Pay upon Invoice method. The buyer pays Ratepay instead of you. Ratepay is responsible for following up with the buyer to ensure the payment is made.
  3. You must inform the buyer that they have 30 days to pay Ratepay via bank transfer.
  4. PayPal may contact you in case a buyer has opened a dispute with Ratepay. You are required to respond to these inquiries.

Buyer experience

  1. Buyer selects the Pay upon Invoice payment option. At the time of payment method selection, display the benefits of deferred payments and the due date for the payment.

  2. The buyer provides their information to process the Pay upon Invoice payment: full name, email, delivery and billing address, date of birth, and phone number.

  3. Near the Buy Now button, show legal text provided in the integration instructions so that the buyer is aware of the terms before you send any information to PayPal.

  4. On a successful transaction, Ratepay emails payment instructions to the buyer. On the Order Success page, you can provide transaction details and notify the buyer to wait for payment instructions from Ratepay. If Ratepay declines the transaction due to buyer risk reasons, you must display the error message as shown in the Error handling section of the Pay upon Invoice integration guide for merchants and partners.

  5. Buyer receives an invoice with cart details and Ratepay’s payment instruction details, including the payment reference number, that are returned in the API response.

    Always use the payment instructions details provided on a per transaction basis to ensure accuracy. In the invoice, instruct the buyer to pay only with Ratepay.

    Here's a sample invoice:

  6. Buyer pays Ratepay by logging into their bank account and making a bank transfer. If you have a simplified integration, you are obliged to ship the order within 7 calendar days.

  7. If the buyer does not pay within the due date, the buyer is subject to dunning fees charged by Ratepay. There is no action required from you during the follow-up and dunning process.

Dispute Handling

Buyers can open a dispute with Ratepay. You must respond within 10 business days with evidence, either through the PayPal Resolution Center or with the Disputes API. If you do not respond within the timeframe, you are subject to an automatic reversal of the disputed funds.

When responding to disputes, you must:

  • Provide the carrier name and shipping tracking number.
  • Provide the invoice you sent to the buyer as part of the evidence.
  • In certain cases, additional written explanation may be required (if a buyer has sent the item back but claims he has not received a refund).
  • Retain the proof of shipment and delivery for at least 180 days from the time of order placement. There might be instances when you are asked for this evidence after 90 days of order placement for Ratepay to legally defend a buyer-defaulted transaction. If you do not provide this evidence, you are subject to an automatic reversal of the disputed funds.

Carrier companies delete the tracking information after 90 days, so make sure you have an image or PDF copy to respond to the dispute and avoid the reversal of funds.

VAT Statements

You can access monthly VAT Statements through your PayPal account. These statements reflect a summary of VAT collected by PayPal for any fees charged by PayPal. You may use these statements to claim your tax credits or self-assessment of VAT charges.

Integration methods