New enhanced and simplified code version replacement (March 2019):
See: WooCommerce: Auto complete paid orders
Original answer:
For Paypal and other third party gateways, the "paid" order status to target is "processing" (and "completed"), so you can lightly change the code to:
add_action( 'woocommerce_thankyou', 'wc_auto_complete_paid_order', 20, 1 );
function wc_auto_complete_paid_order( $order_id ) {
if ( ! $order_id )
return;
// Get an instance of the WC_Product object
$order = wc_get_order( $order_id );
// No updated status for orders delivered with Bank wire, Cash on delivery and Cheque payment methods.
if ( in_array( $order->get_payment_method(), array( 'bacs', 'cod', 'cheque', '' ) ) ) {
return;
// Updated status to "completed" for paid Orders with all others payment methods
} elseif ( in_array( $order->get_status(), array('on-hold', 'processing') ) ) {
$order->update_status( 'completed' );
}
}
Code goes in function.php file of the active child theme (or active theme). tested and works.
This way you will avoid "failed", "Cancelled" or "Pending" orders.