How to use billing agreement with chained payments?

Question

We are setting up our marketplace transactions with PayPal and thus want to use chained payments for simple processing and to prevent being a funds aggregator.

As we want to capture buyers payment method once (upfront) and allow them to buy services from sellers later without entering their payment details every time, PayPal has 2 options: 1) pre-approvals, or 2) billing agreements.

However since buyers should also be able to pay with credit card, we can only use option 2) billing agreements.

Is our understanding correct that billing agreements are not compatible with chained payments?

Also, if they are not compatible, how can we go about it to allow for: - Users to pay with credit card - Not have them enter the credit card details every time at the time of purchase - Use chained payments (prevent funds aggregation which would happen if we receive funds first and payout in a second operation)?

Thanks!

Answer 1

Preapproved Payments is part of the Adaptive Payments platform. Depending on what you're doing with the transaction when the time comes to submit a payment with a preapproval profile you may use a simple payment, parallel payment, or chained payment.

What you're after, billing agreements, is part of the Express Checkout API or Payments Pro. The actual term for what you'll be working with is Reference Transactions.

If you process a credit card directly over Payments Pro (either sale or auth) then you can simply use that transaction ID you get back with the DoReferenceTransaction API at any point in the future to process another transaction automatically.

If you process the original sale or authorization with Express Checkout, that's where you need to include billing agreement parameters in your SetExpressCheckout request to create that billing agreement, but then you'd still use the DoReferenceTransaction API to process future payments.