PayPal ACH

Paypal ACH Transfer

PayPal ACH payments are electronic transfer transactions that are conducted over the PayPal network. Funds are drawn from the payer’s PayPal account and transferred to the payee’s PayPal account.

Mass Payments

The payee can then use those funds directly to pay for goods and services that accept PayPal or transfer those funds to a bank account connected to PayPal. PayPal acts as a clearinghouse between users, which also includes ensuring that funds are transferred to suitable users with good standing. Funds are usually received immediately, but if there are issues, those funds may be held by PayPal.

In exchange for this service, PayPal charges a flat transaction fee plus a percentage of the overall transaction amount to the payee.

To manually execute a high volume of PayPal instructions, PayPal may require a payer to establish a Mass Payment account.

• “PYPL” – NASDAQ Stock Ticker

• “PayPal Mass Pay” – Version of PayPal geared for mass payments

• “PayPal ACH”

• “PayPal ACH Transfer”

• “PayPal ACH Debit”

• “PayPal wire transfer”

• Known brand and market leader

• Large adoption footprint

• Offers multiple ways to extract money

• High percentage-based transaction fees

• Not designed for paying large volume of payees

• Unclear policies on holding of funds or misdirected funds

• Few controls for when funds are sent incorrectly

• Focused more on pay-in processing

• Not all countries serviced

• Not a popular service in all countries

• Challenging reconciliation processes

• $10K limit per payments

Requires payer and payee to set up an account using an email address.

Best Use Case for PayPal

PayPal is very active in digital communities, including online marketplaces, crowdsourcing, and other on-demand and sharing economies. Most of those payees have PayPal accounts so transactions are normally low-friction. Most established, regulated countries have support for PayPal.

Worst Use Case for PayPal

For some communities and countries, PayPal is not a good fit, either because of reach (e.g. Pakistan) and banking issues, or because of a regulatory issue. Also, the transaction fees can be too expensive for many payees.

How Tipalti Works with PayPal

When payees select PayPal during the onboarding process as their chosen method of payment, Tipalti ensures they are provided a suitable PayPal account (email address), which Tipalti verifies immediately with PayPal. This reduces the risk that payments will be rejected due to incorrect information. The payer can decide if PayPal is an option based on country of origin. Tipalti also allows the payee to choose certain payment thresholds so they can decide when payment is sent. Payers can also determine how much or if any fees related to a PayPal transaction are passed to the payee.

To streamline communications, Tipalti directs all payments at once through various payment method interfaces. The payer does not have to directly communicate with PayPal or access PayPal other than to fund the account. To prevent overdraft, only adequately funded accounts will enable payments. As a courtesy, an email is sent to the payee indicating that payment has been sent to their PayPal account.

Should issues arise (such as a failed transaction), Tipalti reports the error and sends a new message to the payee. If the payee can correct the condition, they are automatically sent a branded email on behalf of the payer with information for remedying the situation.

What is ACH debit Paypal?

When a transaction is made through Paypal, Paypal acts as the depositor in the ACH debit transaction. Even in the case of a third-party application process, an ACH Paypal debit can occur through the Paypal API when an electronic request is made to a financial institution requesting funds or making a deposit.


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