Understanding Recurring Payments

Stored Payment Methods & Recurring Payments

Payment methods that support accepting credit card details directly — such as Stripe, and PayPal in card-processing mode — allow customers to securely store their card details on file. This provides several important benefits:

• Customers do not need to re-enter their card details for future purchases.
  

• Renewal payments are processed automatically when due.
  

• Renewals continue to work even if the renewal amount changes (for example, when upgrading a subscription).
  

• Administrators can manually charge outstanding invoices against a stored card.

PayPal Billing Agreements (Redirect Mode)

When using PayPal in its standard redirect mode (where users are sent to PayPal’s website rather than entering card details directly on your site), recurring payments are handled through Billing Agreements.

With Billing Agreements, PayPal stores and manages the recurring payment schedule on its own system. Instead of your community initiating renewals, PayPal automatically charges the customer.

While this may sound convenient, there are several significant limitations:

• Purchases tied to a Billing Agreement cannot be modified. Customers cannot upgrade, and administrators cannot adjust expiry dates or renewal terms. To make changes, the Billing Agreement must be cancelled and recreated.
  

• Payments are processed in PayPal batches, meaning they may not be collected exactly when expected. If there is a payment issue (e.g., expired card details in PayPal), the charge may occur significantly later than the renewal date, potentially extending access longer than intended.
  

• If a customer purchases multiple items with different renewal cycles (e.g., monthly and yearly), a single Billing Agreement cannot be created.
  

• Billing Agreements do not carry over to unrelated purchases. A new agreement must be created for each recurring purchase.

Recommendation

Due to these limitations, we strongly recommend using a payment method that supports securely storing card details directly (such as Stripe or PayPal in card-processing mode) for recurring payments. This provides greater flexibility, better reliability, and a smoother customer experience.