Can A User Cancel A PayPal Payment Plan?

We wanted to know if there’s a difference in the way money is collected, between “payment plan” vs “subscription” service.

Example we want to sell a product with a payment plan:
– Product A = 300$
– plan = 3 payments of 100$ after 30days x 3
– with an immediate charge of 15$

I’ve read your article but still a bit unclear.

The reason we’re asking is that our current cart solution does not make the difference between subscription vs payment plan. So if I would sell a product, someone could cancel anytime the recurring payment. Whereas the payment plan, is something pre-authorized in advance and no way to cancel the recurring payments?

Example Product Plan Set Up In SubscriptionBoss

For your example, we set up the SubscriptionBoss Subscription as follows:

Let’s say that Product A is product 47 in Infusionsoft

  • Initial charge: $15, product number is p47, product name is “Product A”
  • Recurring Charge $100, Frequency 1 Month, 3 Billing Cycles, Billing Delay 30 days, product number is p47, product name is “Product A”

The $15 is taken at the time of the order but the user can cancel at any time in the next 90 days.

Infusionsoft will issue the same invoice 4 times, once after each payment, with each showing the total invoice amount, the amount paid and the outstanding balance.

PayPal Payment Plans Can Be Cancelled

PayPal does not pre-authorize in the same way as credit cards – in this example a payment profile of 3 payments it set up – the payments will take place only if a) the buyer has a sufficient funds and b) they do not cancel during the agreement.

Payment Plan Cancellations

With PayPal, the buyer can cancel at any time, so you need to handle this. PayPal will generate an Instant Payment Notification and SB will capture this and can run an action set in Infusionsoft. This will typically do a number of things

  • Cancel the subscription order
  • remove some tags or make an http post that remove access to the service
  • send the buyer an email confirming the cancellation
  • send an email to an administrator if you need to take manual action to initiate recovery of physical goods that have been sent

Payment Plan Payment Failures

Also, you may be notified of Payment Failures, PayPal tries 3 times to take each payment with 5 day intervals between attempts. SB will receive notification of these failures.

You have the option to set up action sets that email the buyer to let them know of the failure and encourage them to take action so their PayPal account is properly funded.

You can send them the same email on each failure or do some more sophisticated payment failure handling depending on whether or not it is a frequent occurrence and important to your business.

Advanced Payment Settings

A possible option when using a Payment Plan is to check the AddToNextBilling box. This means that if at the end of the first month that payment fails (3 times) then it will try and collect double the amount on the second month, the outstanding amount due at that time. Use this feature if you want to try and take payment automatically more than 3 times. Whether you use this setting or not, you can always log into PayPal manually and request the outstanding balance.

Screenshot of Add to Next Billing indicator

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