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Set up PayPal Payment Method for WooCommerce Subscription

Last updated on June 28, 2023

PayPal handles the automatic recurring subscription payment in the following two different manners:

  • PayPal Standard
  • PayPal Reference Transactions

Subscriptions for WooCommerce provide an extension for PayPal, which is the inbuilt WooCommerce payment gateway


In order to track recurring payments and get updates on subscription status, both payment gateway options, PayPal Standard and Reference Transactions rely on a PayPal business account and a PayPal IPN (Instant Payment Notification).

Configure PayPal IPN

  • From your PayPal Business account, navigate to Profile > Account settings > Notifications.
  • Update the Instant payment notifications.
PayPal account settings
  • To start or stop receiving IPN messages and to decide where to send them, click the Choose IPN Settings button.
PayPal account settings
  • Enter the notification URL and enable Receive IPN messages as shown below:
PayPal IPN Settings
PayPal IPN Settings
  • Click on Save to finish.

PayPal Standard

PayPal Standard is a widely used and easy set-up payment method. To configure PayPal Standard integration with WooCommerce, follow these steps:

  • From the WordPress dashboard, WooCommerce > Settings > Payments.
  • Use the toggle under Enabled to select PayPal.
  • Select Set up and this redirects to the PayPal Standard settings.
  • Enter your email address in the PayPal Email field. Ensure that the email entered matches the email associated with your PayPal Business account.
PayPal-Basic details
PayPal-Basic details

Set up advanced options

PayPal-Advanced Options
PayPal-Advanced Options
  • PayPal Sandbox – Use this option to test the checkout process during store development. It creates a separate sandbox account for PayPal testing purposes.
  • Debug Log – Enable this option for debugging during development. It generates logs that can be accessed at WooCommerce > System Status > Logs.
  • Instant Payment Notifications (IPN) – Enable this option to receive IPN email notifications for payment-related events.
  • Receiver email – Enter an email address if this address is different from the PayPal email address.
  • PayPal Identity Token – This optional field is only required if you signed up for the Data Transfer option on your PayPal account.
  • Invoice Prefix – Enter invoice prefix (useful if you have multiple stores).
  • Shipping details – Enable sending the shipping details to PayPal to create shipping labels instead of billing.
  • Address override – Once enabled PayPal verifies addresses, therefore, it is recommended to keep it disabled, However it can be useful in preventing address information from being modified.
  • Payment Action – Select whether to capture funds immediately or only authorize them.
  • Page Style and Image URL – Customize the appearance of the PayPal checkout screens by entering the page style name and logo image URL.

Enter API Credentials

To get the API credentials:

  • Log in to your PayPal business account.
  • Access API Access credentials through either the Activity section or Account settings > API Access.
  • Under NVP/SOAP API Integration (Classic), click on Manage API credentials
  • Create API keys if not done already or copy the existing API Username, API Password, and Signature.
  • Paste the API Username, API Password, and Signature into the respective fields in the plugin’s settings.
PayPal-API Credentials
PayPal-API Credentials

PayPal Reference Transactions

PayPal Reference transactions are utilized when the standard PayPal integration does not meet specific requirements or when advanced subscription features need to be implemented. It is important to note that PayPal Reference transactions are available only to privileged customers who have been approved by PayPal. If your PayPal account is approved for Reference Transactions, the Subscriptions plugin will automatically detect this and switch to using Reference Transactions as the payment method for subscriptions. However, if your account does not have Reference Transactions enabled, WooCommerce Subscriptions will continue to use PayPal Standard for both subscription purchases and recurring payments.

To learn more about enabling Reference Transactions with PayPal, please refer to How do I get Reference Transactions Enabled with PayPal?

Multiple options can be selected.