PayPal says 'Your payment was declined'? Why it happens, and the fix for each cause

Cause 1: The card issuer or bank said no

When the card itself is declined, PayPal's help is blunt about one thing: your card issuer or bank doesn't tell PayPal why. That is done to protect the cardholder's privacy, and it means PayPal support genuinely can't see the reason. Only the bank can.

PayPal's page on card issuer declines names the most common reasons it sees:

• The card details are out of date. The card has expired or been closed, or the expiry date saved in PayPal is old. Update it in 'Wallet'.
• The billing address doesn't match. The billing address on the PayPal account isn't the one on the card statement, for example after a move. Make them the same.
• The amount is more than the available credit on the card.
• The amount is over the card's spending limit, or more than the available balance on a debit card.
• If none of those fit, the buyer should contact the card issuer, using the number on the back of the card. PayPal's help sends people there for the same reason: the bank is the only one that knows why it said no.

Cause 2: PayPal wants the card confirmed first

This is the one that confuses people, because the card works everywhere else. PayPal says its security system may sometimes decline a credit or debit card to make sure the card belongs to the person using it. The sign is a 'Confirm Card' link next to the card in 'Wallet'. If there is no link, PayPal has already confirmed that card and this isn't the cause.

Confirming takes a few days, so a buyer who needs to pay today is better off choosing another payment method and confirming the card afterwards. To confirm it:

• Log in to PayPal, go to 'Wallet', click the card and click 'Confirm Card', then review the details and click 'OK'.
• PayPal places a small charge on the card. Its US help page gives the amount as $1.95 USD.
• Look at the card statement for a description like 'PayPal*1234 CODE' or 'PP*1234 CODE'. The 4 digits are the code. It shows within minutes if the statement lists pending charges, otherwise 2 to 3 business days after the charge posts. PayPal won't give the code by email or phone.
• Back in 'Wallet', click the card, enter the 4-digit code and click 'Confirm'.
• If you asked for the code more than once, there will be more than one charge. Use only the most recent code. PayPal lets you request a new code up to 3 times.
• PayPal refunds the charge as soon as you confirm, and the issuer should credit it within 30 days. If you never confirm, the charge is refunded automatically 75 days after it was made.

Cause 3: The bank account payment couldn't be approved

Paying from a linked bank account works differently from paying by card. PayPal explains that instant bank account payments aren't processed by the bank straight away. PayPal handles them in real time, but the money can take 2 to 5 business days to clear, so PayPal can't always be sure the bank will accept the payment and may decline it up front.

Banks return these payments for three main reasons: not enough money in the account, an account that has been closed, or bank details that are wrong or don't match the bank's records. A returned payment can cost the buyer a bank fee and can leave their PayPal balance negative. While the balance is negative, PayPal won't approve another bank payment.

• Look for a 'Resolve Negative Balance' link after logging in, and use it to bring the balance back to zero.
• Make sure the bank account is active, confirmed and able to accept payments. If you have only just started confirming it, PayPal says that can take 2 to 3 business days.
• Check there is enough money in the account before paying.
• If it is declined again, pay with a card or add money to the PayPal balance first. That is PayPal's own suggested route.

Cause 4: Something on the buyer's PayPal account needs attention

Sometimes the card and bank are fine and it is the PayPal account itself. PayPal's decline page lists three account-level reasons: the account has a limitation that has to be resolved, PayPal needs the person to confirm their identity as a security check, or the email address on the account hasn't been confirmed yet.

All three show up as a notice when the buyer logs in to paypal.com, and clearing them is done there, not at the seller's checkout. Confirming an email address is quick. Limitations take longer and have their own steps, which we cover in a separate post. Either way, the buyer can usually still pay the seller another way while it gets sorted.

Cause 5: The seller's settings are holding the payment

This one isn't strictly a decline, but buyers often describe it as one because the money doesn't arrive. PayPal Business accounts have 'Payment Receiving Preferences', where the seller can choose to block payments from customers without a confirmed address, payments in a currency they don't hold, payments with duplicate invoice IDs, and payments from customers in other countries.

A confirmed address is one PayPal has been able to check, and PayPal says most addresses outside the U.S., U.K. and Canada can't be confirmed at this time. So a seller who blocks unconfirmed addresses can end up stopping a lot of international buyers without meaning to.

When a payment is caught by one of these settings, PayPal holds it and the seller has 30 days to accept or deny it. If nobody acts, PayPal cancels it and returns the money to the buyer's original payment method, which can take up to 5 business days for a bank account and up to 30 days for a card. The buyer can't cancel a payment held this way themselves.

• Seller: open your PayPal activity, find payments waiting for you to accept or deny them, and accept the ones you want.
• Seller: review 'Payment Receiving Preferences' and only keep the blocks you actually need. Blocking a currency you don't hold, for example, turns away buyers who don't pay in your currency.
• Buyer: if the payment shows as pending or unclaimed, tell the seller. A payment that is unclaimed because the email or phone number isn't linked to a verified PayPal account can be cancelled from 'Activity' by clicking 'Cancel' under it.

Cause 6: 'PayPal cannot process your payment. Please contact the merchant'

If the buyer sees exactly this message, the fault is the seller's, and PayPal's help names the reason: the HTML code for the payment button is formatted incorrectly. In other words, the code on the seller's website no longer matches the button PayPal created.

Seller: open your saved buttons at paypal.com/buttons/saved, compare the code PayPal shows there with the code on your site, and correct anything that differs. Buyer: there is nothing to fix on your side, so let the seller know and pay another way if they offer one.

Prevent it next time

Most declines can't be prevented by the seller, but a few habits make them rarer and shorter.

• Buyers: keep the card's expiry date and billing address in 'Wallet' up to date, and confirm a new card as soon as you add it rather than at checkout.
• Buyers: keep a second payment method in 'Wallet', so a single declined card doesn't stop a purchase.
• Sellers: if you use PayPal buttons, turn on 'PayPal account optional' so buyers can pay by card without logging in. It is under 'Account Settings', 'Website payments', then 'Update' next to 'Website preferences'. PayPal decides when to show the card option based on risk factors such as the buyer's location and purchase history, so it won't appear for everyone.
• Sellers: check 'Payment Receiving Preferences' once and remove blocks you didn't choose on purpose.
• Sellers: when a customer says PayPal declined them, offer a second way to pay instead of asking them to fight their bank.

Giving buyers a second way to pay

If you sell through a OneSol page, the Pro plan lets you take payments through your own Stripe, PayPal, Razorpay or Square account, so a buyer whose PayPal is declined can still pay you by card another way.