Magento 1.x Software Support Notice
For Magento Commerce 1, Magento is providing software support through June 2020. Depending on your Magento Commerce 1 version, software support may include both quality fixes and security patches. Please review our Magento Software Lifecycle Policy to see how your version of Magento Commerce 1 is supported.
PayPal Billing Agreements
To simplify the checkout process, customers can enter into a billing agreement with PayPal, as the payment service provider. During checkout, the customer chooses the billing agreement as the payment method. The payment system verifies the billing agreement by its unique number, and charges the customer's account. It is no longer necessary for the customer to enter payment information for each purchase.
Customers can create billing agreements by signing in to their customer accounts, selecting the billing agreement payment method, and initiating the Billing Agreement process. When a billing agreement is created, it is submitted to the PayPal payment system and recorded in the customer account, along with reference information. There is no limit to the number of billing agreements a customer can create. The customer can also cancel some, or all of the billing agreements on the Billing Agreement page of the customer account. The status of each billing agreement is shown as either “Active” or “Canceled.” When a billing agreement is canceled, it cannot be reactivated.
When checking out products from the shopping cart, a customer who has already entered into a billing agreement with PayPal can choose the PayPal Billing Agreement payment method in the Payment Information section of the checkout page, and select the billing agreement reference ID from the list. When the customer places the order, the billing agreement reference ID and sales order payment details are transferred to the PayPal payment system. After the payment system confirms the payment, a sales order is created in Magento.
If the customer purchasing items from the web store does not yet have a billing agreement with PayPal, she or he can choose the PayPal Express Checkout method of payment, select the Sign a billing agreement to streamline further purchases with PayPal checkbox, and be redirected to the PayPal payment system where the customer payment information is available and the billing agreement can be signed. After a billing agreement with the store is signed, the customer is redirected back to the Magento frontend, where an order is placed. A corresponding record appears in the billing agreements list.
Additionally, the customer who has no billing agreements in the customer account can also sign a billing agreement from the mini shopping cart or from a product view page by clicking the Check out with PayPal button, that is, by using the PayPal Express Checkout payment method. This opens a dialog box that gives the customer the option to sign a billing agreement with the PayPal payment system. If the customer cancels creating a billing agreement, the order is created through the normal PayPal payment process.
If the customer has one or more billing agreements, the customer can still create a new billing agreement from the customer's account, but will not be able to sign a new billing agreement using the PayPal Express Checkout payment method.
When the customer signs a billing agreement during the order checkout, PayPal creates a payment transaction through the PayPal Express Checkout payment method selected by the customer (that is, a sales order is created in Magento), and a billing agreement reference ID which is sent to the customer and the store. The currently created order is not related to the billing agreement that is signed. Related billing agreement-order records are created in Magento the next time that the customer selects this billing agreement as a payment method and places an order.
On a customer’s request, the store administrator can create a sales order and after filling in all required information for order currency, items, billing and shipping addresses, she or he needs to select the PayPal Billing Agreement payment method and specify the reference number for a specific billing agreement. When the order is submitted, the billing agreement reference ID is transferred to the PayPal payment system and, if the payment is authorized, an order is created in Magento.