PayPal Subscription and Recurring Payments Discussed

PayPal Recurring payments is a great way to quickly create subscription plans for products and services. This is a great solution to manage and automate subscription billing.

Continue reading if you are unsure if PayPal Recurring Payments is right for you.

There are many topics to be covered, so let’s get started.

What are PayPal Recurring Payments and how do they work?

PayPal recurring payments is a simple way to accept credit and debit cards online, PayPal and ewallet payments, and to manage repeat billing. Most importantly, online invoicing, email and website sales.

PayPal Recurring payments are ideal for entrepreneurs who want to bill customers for subscriptions, memberships, repeat products, and/or services. You can also offer partial payment plans to your customers with this service.

PayPal offers an app that you can use if you are a busy business owner and need to be on the move all the time. You can also manage your subscription billing from anywhere, anytime.

PayPal Recurring Payments does not accept e-checks and ACH payments at the moment of writing.

What is the cost of PayPal recurring payments?

There are no monthly fees. Instead, you will pay a 2.9% processing fee plus 30 cents per transaction.

What are the Pros and Cons to PayPal Recurring Payments?

Let’s begin with the perks…

PayPal’s brand name carries some weight

PayPal has a huge following worldwide. This is great for building trust in your customers. PayPal is recognized at 72%, compared to the other payment gateways that are less popular.

Go Global

PayPal boasts over 137 million active PayPal accounts from users in 193 countries. This could be a great way to reach an international audience. PayPal Recurring Payments allows you to accept payments in 24 different currencies.

Monitor your Transactions

You can easily keep track of both your outbound and inbound transactions with just one click. You can also download all transaction history to be passed to your accountant for tax season.

The drawbacks

Here are the cons of PayPal Recurring payments:

You Must Follow Certain Rules

PayPal’s rules to prevent fraud have been tightened since September 2011. Any slight increase in your average transaction amount can lead to your account being frozen or your money locked up, making it impossible for you to access your funds. Many PayPal users complain that PayPal doesn’t provide any explanations for why their account was frozen or closed. Merchants cannot appeal this decision so they have to just lump it together!

Lousy Customer Service

It’s not surprising that PayPal’s customer support is not doing well after reading the above. Some customers complain that they have to go through extra steps to reach a live customer service rep.

PayPal’s verification process is long

While setting up a PayPal account for business is easy, it can be difficult to get your account “verified”. PayPal may require additional documentation to verify your account. Most importantly, utility bills and government-issues.

How to set up PayPal recurring payments

First, make sure you have a PayPal account for your business. After you have set up your account, make sure to remember your username and password. Access to your website’s HTML codes is also required. Follow the steps below to create your first PayPal Recurring Payments subscription plan. This should take approximately 15 minutes per plan.

  1. Create a PayPal account for your business if you don’t have one.
  2. Register for your PayPal Business account.
  3. Go to the “Manage Subscriptions” page and click “Create a Plan.” ‘
  4. Select the product type (physical or digital) and choose the industry category that best describes you business .
  5. Copy the URL of your subscription plan’s sales page in a separate tab and paste it into the field that says ‘Product Page URL’.
  6. Click ‘Next. ‘
  7. Next, choose whether you prefer fixed pricing or quantity pricing. Then, click Next’. Please note: Fixed pricing charges your customer the same every billing cycle, depending on the subscription plan they have chosen. Quantity pricing, on the other hand, charges the customer the same every billing cycle, depending on the quantity they choose.
  8. Now it’s time to create a plan title (visible to your customers) as well as a description. This is your reference only; customers won’t be able to see it. Once you are done, click “Next.”
  9. Next, set the price for your subscription plan. You will need to choose your preferred currency and price. If you do not charge a set-up fee, you can also disclose whether or not you charge an optional one-time setup fee. Finally, you will need to explain how you’ll calculate the tax for your subscription plan. After entering your tax rate, click ‘Next’ to finish.
  10. Next, you will need to choose your billing cycle. This is how often you’ll be charging your subscribers, such as daily, weekly or monthly. PayPal will also need to know the length of the plan and how many payments are required to terminate the charge. Optionally, you can also indicate whether you offer a trial period. Once you are done, click “Next.”
  11. You’re now ready to confirm your subscription details. Hit ‘Save Plan’ once you are happy with them. Finally, make sure you’re ready for ‘Turn On Plan’. ‘
  12. You can now add a subscription button to your site.

Alternatives to PayPal Recurring payments

You don’t have to launch a PayPal subscription model. There are many reputable alternatives.

Square Recurring Payments

Square is similar to PayPal Recurring payments. It makes it simple to manage your customers’ recurring bills. Square processed 600,000 invoices in a month. Impressive, right? !

Square Recurring payments allows you to handle recurring billing in one of two ways

  1. Customers with a debit/credit card can receive recurring invoices: This allows you to take automatic payments for a fixed amount each billing period. This could be a great option if you have a monthly subscription.
  2. Invoices can be sent as stand-alone bills for card-on file payments. This is great for billing repeat customers for different amounts over time.

The pros

  • It is easy to set it up.
  • Square’s pricing policy is very straightforward.
  • Square is a trusted brand that is easily recognized and trustable, which can help you build credibility with your target audience.
  • Square is easy to use
  • Square’s reporting functionality can be accessed easily.

The Cons

  • One user stated that they would like to see Square’s sales reports include more flexible categorization.
  • One Square customers stated that they would like to see more opportunities for freelancers
  • Square could make its onboarding process more interactive


Chargebee allows you to easily take regular, usage-based and one-time payments, regardless of your customer billing agreement. Chargebee allows you to choose how to process payments. You have a lot of flexibility when it comes to setting up the billing system that suits your business best.

The pros

  • Chargebee’s API is available to you. If you are a programmer, you can get into the customizations of the platform.
  • There are many payment options that you can use to process your payments, including Apple Pay via Stripe and Braintree and PayPal Express Checkout. You also have the option of processing cards and Amazon Payments.
  • Customers can easily get a free trial
  • Chargebee’s coupon feature has a sophisticated design
  • You can create a template to encourage your subscribers to update their card information.

The Cons

  • Chargebee’s interface doesn’t work well on mobile devices
  • The Chargebee dashboard cannot be customized
  • Chargebee is definitely on the pricier side
  • One user stated that they would like to be able customize their invoices.


Recurly, another recurring billing platform worth looking into, is also worth your consideration. Recurly, which is its own payment gateway, allows you to make credit card payments over the phone if you are located in the US.

The pros

  • Recurly is very intuitive to use and extremely versatile.
  • They offer excellent customer service.
  • Recurly’s dunning method is unmatched.
  • Recurly makes it easy to invoice.

The Cons

  • Transactions older than six months cannot be refunded.
  • Reports you create can’t contain usernames.
  • Recurly could have a more specific role/permission system.

Braintree Recurring payments

Braintree, which was founded in Chicago in 2007, was purchased by PayPal in 2015. Braintree allows you to receive funds in over 130 currencies and offers a wide range of payment options.

The pros

  • Integrates with many third-party shopping carts
  • Verify bank account information instantly.
  • Braintree offers a variety of payment options.
  • Braintree has a high level of security.
  • Flat-rate pricing is a standard feature.
  • There are many developer tools.

The Cons

  • If you are in high-risk industries, Braintree is not an option.
  • Some users have reported having their accounts closed and funds withheld without any warning.
  • Many customer service representatives lack the skills and knowledge to offer adequate assistance.

Are you ready to start using PayPal Recurring payments?

After reading this review, you may feel that PayPal Recurring Payments is right for you subscription-based company. Let us know your thoughts in the comments below. You can also choose to use one of the other payment options listed above. We’d love for you to let us know!