> For the complete documentation index, see [llms.txt](https://docs.ecommerce.seb.ee/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ecommerce.seb.ee/payment-methods/wallets/paypal.md). # PayPal PayPal is one of the world’s most widely used digital payment platforms. Customers pay by logging in to their PayPal account and confirming the purchase – the payment is funded by their PayPal balance, a linked card, or a linked bank account, at the customer’s choice. No card or bank details are entered on your pages or shared with your shop. The SEB Ecommerce Payment Gateway supports PayPal as an external wallet-based payment method. The gateway initiates the payment, securely transfers the customer to the PayPal-controlled checkout flow, and receives and presents the transaction status within the gateway interfaces – alongside your other payment methods. PayPal is particularly valuable for cross-border sales and for customers who prefer not to share payment details with individual shops: the familiar PayPal login and PayPal’s buyer protection programs give many customers the confidence to complete a purchase from a merchant they have not shopped with before. {% hint style="warning" %} PayPal operates as an independent payment platform with its own systems, APIs, and contractual framework. Unlike Apple Pay, Google Pay, or Click to Pay – which deliver card credentials processed through the card networks – PayPal itself performs customer authentication, authorization, payment processing, settlement, and dispute management. Understanding this difference is essential; see “How PayPal Differs from Card-Based Wallets” below. {% endhint %} ### Capability Summary
CapabilitySupport
Payment TypeExternal digital wallet (independent payment platform)
Funding SourcesPayPal balance, linked cards, linked bank account – selected by the customer within PayPal
Checkout FlowPayPal-controlled – redirect or embedded checkout
Customer AuthenticationPerformed by PayPal (PayPal login)
Payment Processing and SettlementPerformed by PayPal under its own contractual framework
Transaction StatusReceived and presented in the Gateway interfaces (Merchant Portal, API, callbacks)
DisputesManaged under PayPal’s dispute resolution framework
Integration OptionsHosted Checkout, Merchant API, supported web plug-ins (where applicable)
Sandbox TestingAvailable
Availability of individual capabilities depends on your merchant agreement, enabled services, and your approval and configuration with PayPal. ### How PayPal Works A typical PayPal payment through the gateway: 1. The payment is initiated. You initiate the payment via your integration – Hosted Checkout, Merchant API, or a supported web plug-in – the same way as for other payment methods. 2. The customer is handed over to PayPal. The gateway securely transfers the customer to the PayPal-controlled authentication and authorization flow – as a redirect to PayPal or an embedded PayPal checkout, depending on the integration. 3. The customer confirms in PayPal. The customer logs in to their PayPal account, selects a funding source (balance, card, or bank account), and confirms the payment. Authentication is performed entirely by PayPal – customer's PayPal account credentials are never processed or stored by the gateway. 4. PayPal processes the payment. PayPal authorizes and processes the payment under its own systems. The customer is returned to your checkout flow. 5. The status is returned to your systems. The gateway receives the transaction status from PayPal and presents it in the Merchant Portal, in the API response, and – if configured – via callback notifications. Update your order status based on the confirmed payment status. ### How PayPal Differs from Card-Based Wallets From the customer’s point of view, PayPal is “just another wallet button.” Operationally, it works differently – and this affects your settlement, reconciliation, and dispute handling:
AspectApple Pay / Google Pay / Click to PayPayPal
What is paid withA tokenized payment cardThe customer’s PayPal account (balance, linked card, or bank account)
Who processes the paymentThe card networks and your acquirer, via the gatewayPayPal, under its own systems
SettlementThrough your acquiring agreementBy PayPal, under your agreement with PayPal
DisputesCard scheme chargeback processesPayPal’s dispute resolution framework
Contractual relationshipYour merchant agreementYour merchant agreement plus your own agreement with PayPal
Role of the gatewayFull transaction processingTechnical integration: payment initiation, customer hand-over, status presentation
### Customer Experience During checkout, the customer: 1. Selects PayPal as the payment method. The PayPal button is displayed among your available payment methods. 2. Logs in to PayPal. In the PayPal window, the customer signs in with their PayPal credentials. Returning customers may be recognized and signed in faster, depending on their PayPal settings. 3. Selects a funding source and confirms. The customer sees the amount and merchant name, chooses how to fund the payment, and confirms. 4. Returns to your shop. The payment result is reflected in your order flow. No card or bank details have been entered on your pages. ### What You Need to Accept PayPal Accepting PayPal requires two relationships – one with SEB and one with PayPal: 1. A PayPal business account approved by PayPal. PayPal payments are processed and settled by PayPal under its own terms. You need an approved PayPal business account, and your participation is subject to PayPal’s approval and its applicable technical and commercial requirements – including PayPal’s fees, which are separate from your SEB merchant agreement. 2. PayPal enabled in your e-shop agreement. PayPal is enabled as a payment method in your e-shop agreement. Contact your SEB representative to have PayPal activated for your shop and to link your PayPal account configuration to the gateway. #### If You Use Hosted Checkout Once PayPal is enabled for your shop and your PayPal account configuration is in place, the PayPal button appears on the gateway-hosted payment page automatically – the gateway manages the hand-over to PayPal and the status handling on your behalf. #### If You Build Your Own Checkout (Merchant API or Web Plug-ins) You initiate PayPal payments through the Merchant API – or through a supported web plug-in, where applicable – and handle the customer hand-over to the PayPal flow and the return to your shop as described in the integration guide. Present the PayPal button in accordance with PayPal’s brand guidelines. Note: SEB acts solely as a technical service provider within the transaction flow and does not process or store PayPal account credentials. Activation and continued availability of PayPal are subject to approval by PayPal and compliance with PayPal’s applicable technical and commercial requirements. ### Settlement and Reconciliation PayPal performs payment processing and settlement under its own systems and contractual framework: funds from PayPal payments are settled by PayPal to your PayPal business account, under PayPal’s terms and timelines – separately from the settlement of your card transactions. For day-to-day operations, this means: * Use the Merchant Portal, API responses, and callback notifications for transaction status and order management – PayPal transactions are visible alongside your other payment methods. * Use your PayPal business account for financial reconciliation of PayPal funds, payout schedules, and PayPal’s fee reporting. ### Refunds and Disputes PayPal processes refunds and returns funds to the customer through the PayPal platform. The refund is reflected in your PayPal business account. Where supported by your configuration, initiate refunds through the gateway. This keeps the refund visible in the Merchant Portal, API responses, and callback notifications. Refunds issued directly in your PayPal business account are not reported to the gateway. Contact your SEB representative to confirm the refund options available for your setup. Disputes for PayPal payments are managed under PayPal’s dispute resolution framework – including PayPal’s buyer and seller protection programs – rather than through card scheme chargeback processes. You respond to PayPal disputes in your PayPal business account, following PayPal’s rules and timelines. Familiarize yourself with PayPal’s seller protection requirements, such as shipping to the confirmed address and retaining proof of delivery. ### Availability PayPal is available to customers with a PayPal account, on any device and in any modern browser. Availability for your shop is subject to your approval by PayPal, regional availability, supported currencies under PayPal’s terms, and ongoing compliance with PayPal’s requirements. Always provide alternative payment methods for customers who do not use PayPal. ### Displaying PayPal * Use the official PayPal buttons and marks provided by PayPal; do not modify the artwork or create custom versions. * Follow PayPal’s brand and acceptance mark guidelines for placement, sizing, and styling. * Display PayPal with at least equal prominence to other payment marks where it is offered. Hosted Checkout presents PayPal in accordance with these requirements automatically. If you build your own checkout, you are responsible for compliance with PayPal’s guidelines. ### Testing Complete all development and validation using the Sandbox environment before processing live transactions. PayPal provides sandbox accounts for testing, so no real transactions take place during development. Before requesting Production activation, verify: * The PayPal button is displayed at checkout and the hand-over to the PayPal flow works correctly. * Successful payment processing, including the customer’s return to your shop. * Cancelled and declined payment scenarios – including the customer abandoning the PayPal flow and returning to select another payment method. * Callback or webhook notifications and order status updates based on the confirmed payment status. * Refund handling applicable to your setup. ### Merchant Responsibilities Merchants are responsible for: * Maintaining their PayPal business account in good standing and complying with PayPal’s terms, policies, and commercial requirements. * Displaying PayPal in accordance with PayPal’s brand guidelines. * Providing an alternative payment method if PayPal is unavailable. * Reconciling PayPal settlements and fees in their PayPal business account. * Responding to PayPal disputes within PayPal’s timelines and retaining the evidence required by PayPal’s seller protection programs. * Updating order status based on the confirmed payment status returned by the gateway. ### Frequently Asked Questions #### Do I need my own PayPal account to accept PayPal? Yes. PayPal payments are processed and settled by PayPal under your own agreement with PayPal, so an approved PayPal business account is required. The gateway provides the technical integration – payment initiation, the customer hand-over to PayPal, and status presentation. #### Where does the money from PayPal payments go? Funds are settled by PayPal to your PayPal business account, under PayPal’s terms and timelines – separately from your card transaction settlement. From your PayPal account you can withdraw funds according to PayPal’s options for your region. #### How are disputes handled for PayPal payments? Under PayPal’s own dispute resolution framework, not through card scheme chargebacks. Customers open disputes with PayPal, and you respond in your PayPal business account following PayPal’s rules, timelines, and seller protection requirements. #### Does 3-D Secure apply to PayPal payments? No separate 3DS step is performed by the gateway. Customer authentication is carried out by PayPal within its own checkout flow, in accordance with the regulatory requirements applicable to PayPal as a payment service provider. #### Can I use PayPal for subscriptions and merchant-initiated payments? Stored credentials and Merchant-Initiated Transactions through the gateway are currently supported for card payments. PayPal payments are processed as customer-initiated payments through the PayPal checkout flow. If recurring PayPal payments are important for your business, discuss the options with your SEB representative. #### Why is PayPal not shown at my checkout? PayPal appears only when it is enabled in your e-shop agreement and your PayPal account configuration is active and approved by PayPal. Regional restrictions under PayPal’s terms may also apply. Contact your SEB representative if PayPal should be available but is not displayed. ### Related Documentation Continue with the following topics: * [Apple Pay](/payment-methods/wallets/apple-pay.md) * [Google Pay](/payment-methods/wallets/google-pay.md) * [Click to Pay](/payment-methods/wallets/click-to-pay.md) * [Card Payment Lifecycle](/payment-methods/cards/card-payment-lifecycle.md) * [Payment Statuses](/payment-methods/cards/payment-statuses.md) * [Callback Notifications](/integration/merchant-api/webhooks.md) * [Testing](/payment-methods/cards/testing.md) --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation by asking a question. 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