I have a question regarding chained payments and refunds. We are developing an application that sets up a chained payment, with ourselves as the primary receiver and the provider of the service as the secondary receiver. We provide a mechanism for the secondary receiver to refund the complete payment.
What we want to know is what happens when the secondary receiver has no funds in their paypal account? From testing this in the sandbox and from what we've read, it seems that the secondary receiver component of the refund becomes pending (we assume, as funds are pulled down from an associated bank account). Three things:
Has the primary receiver paid the refund in full and is now waiting to get the payment from the secondary receiver. Implying that, at this point in time, the primary receiver is out of pocket?
What happens if funds cannot be pulled down from the secondary receivers associated bank account?
What happens if we attempt a refund from an unverified user with no funds in their paypal account? Once again, does the primary receiver pay the refund in full and hope to collect the secondary receivers portion when they do have funds?
Extrapolating from the documentation:
The primary receiver does not initiate a refund until it receives the secondary receiver's refund.
If the funds cannot be pulled down from the secondary receiver's bank account (or the secondary user has no bank account linked) the refund request is cancelled.
The documentation is explicit in saying that it refunds the secondary to the primary before initiating a refund from the primary. Lack of documentation to the contrary suggests they handle the rest of the problems in this situation the same way they handle other refund problems.
Related
I'm developing a PayPal chained payment app where
Primary receiver = the service provider, gets 90% of payment
Secondary receiver = marketplace, gets 10% of payment
It's all working in the Sandbox environment, but there's a snag - when the primary receiver logs into their PayPal account, and manually refunds a payment they received, the secondary receiver doesn't appear to return their 10% automatically.
E.g.:
Primary receiver was paid $100, passed $10 automatically to
secondary receiver.
Primary receiver decides to refund using PayPal
account interface.
Refund for $100 issued; but secondary receiver
keeps their $10. Primary receiver now out of pocket by $10.
I would like it so that the secondary receiver automatically refunds their portion of a payment if the primary receiver issues a refund.
From reading the documentation from the Refund API (https://developer.paypal.com/docs/classic/api/adaptive-payments/Refund_API_Operation/), I thought this was the default behaviour, no matter if the refund was initiated through an API call or manually through the PayPal account interface.
Do I have this wrong, or is it just a bug with the Sandbox environment?
Would be useful to have this cleared up, as couldn't find any existing threads on the matter.
Update
PayPal Technical Support have told me the following:
Thank you for contacting Merchant Technical Services.
From my understanding you would like to have when a primary receiver perform a refund, the secondary receiver will automatically issued a refund.
If you would like all the receiver to refund the amount, you have to pass the paykey. May I know how the payment was made? If it is using Pay API operation, you have to use Refund API in order to refund the transaction. The refund can't be done by using PayPal account.
Use the payKey of the original transaction in the refund API, it will solve your problem.
And in case if you wish to partially refund the amount, specify the amount to be deducted from primary and secondary receivers in the "receiverList" field.
For more, refer: https://developer.paypal.com/docs/classic/api/adaptive-payments/Refund_API_Operation/#table-3-additional-fields-for-refunds-of-specific-amounts-to-specific-receivers
We are using Adaptive Delayed Chained Payment method to transfer funds from one party to another party with ourselves as an intermediary merchant that takes a percentage. In this scenario we are the primary receiver and there is a secondary receiver as well. In case of a partial refund to the party sending the money (the client) we need to transfer the balance fee less our commission to the secondary receiver.
It seems that we cannot call the "Execute" function after the partial refund process to complete the transaction flow. i.e. once the the client is partially refunded, we as the intermediary and primary receiver hold the balance funds. The secondary receiver does not get paid since we cannot call the "Execute" function. So the balance fee is stuck at the primary receiver end. So how can we send the balance fee to the secondary receiver in this partial refunding process? Any help would be highly appreciated.
Two of us have searched this site and other sites, but cannot find anywhere that addresses this issue.
Thanks
You could just create a fresh Pay request with a single receiver on it to sends whatever funds you owe to whomever you owe it.
I would like to know who is liable if the sender ask for a refund/chargeback for either chained payment and parallel payment.
My guess:
Chained Payment: The primary receiver is 100% responsible for any refunds/chargbacks. In order to process refund from the secondary receiver, the secondary receiver must grand third-party permission to the app.
Because of that, paypal normally does not approve the platform to be the primary receiver. For example, if you take a cut on the transaction as the primary receiver and then proceed the money into the second receiver account, you can be in big trouble if the sender ask for a refund. The reason being that the primary receiver is 100% responsible but in such case, you would only have small percentage of the actual amount. If the secondary receiver does not grant you permission to process the refund, you are screwed.
Parallel payment: All receivers are responsible for refunds/chargebacks.
Any official documentation to backup a possible answer?
I am setting up a system that takes payments through PayPal. I'm using adaptive chained payments so I can charge a transaction fee to my users on free accounts, but it seems as though adaptive MAKEs you have a secondary receiver and makes the secondary have to have a value greater than zero sent to them. Is there a way to disable and only pay the main user if I don't want to charge a transaction fee?
The Pay API does not force a secondary receiver unless you've set the primary receiver flag for the first one to true. All you need to do is create a Pay API request with a single receiver that is NOT set as a primary receiver.
we are in Europe and actually, the guest payments (using credit/debit cards) to a friend aren't allowed.
We are searching an alternative to avoid the paypal registration (we known the limitations of this payment type https://www.x.com/developers/paypal/guest-payments).
We are thinking the next workaround: (using chained payment):
[fee 1] [fee 2]
Guest ------------> Primary receiver -------------> Secondary receiver
(credit card) (business account) (personal account)
So the Primary receiver don't get any money, transfers all the receiver money to Secondary receiver.
The problem is that, when you create the receivers list, you must specify the amount of Primary and Secondary receiver, if we set feesPayer to SECONDARYONLY, we don't know which is the exact amount, because we unknow the amount of fees (fee 1 + fee 2).
We have saw the "Payments Details API Operation", to try to get the fees from PayKey and then complete the payrequest message, but this information doesn't return in the message.
Any ideas ?
Thanks in advance.
In Chained Payments the primary receiver receives the total amount of the payment. Once the primary receives the payments then up to that total amount can be split amongst the other recipients.
For this example a consumer makes a $100.00 payment:
Primary receiver receives $100.00
Primary receiver then automatically forwards the funds to:
Secondary receiver 1 $50.00
Secondary receiver 2 $30.00
Secondary receiver 3 $20.00
This is fine as long as the secondary receiver's collective amount doesn't exceed the primary receivers amount. This should also take care of the fee issue as the secondary receiver who has all the funds are responsible for the fees for both transactions.
You are correct in not knowing the fee amount prior to the transaction. This is calculated by PayPal while payment is being made and there is no option for seeing the possible fee prior to payment. If you are the owner of the receiving accounts you may perform the calculations as you are already aware of the rates being charged.
Let me know if you have any questions.