Enabling PayPal Reference Transactions for Billing Agreements
Enabling reference transactions with PayPal
You will need to contact PayPal Support in order to enable reference transactions on your PayPal business account.
This unique account setting is necessary for successful Autoship PayPal payments, so you'll want to ensure this setting is enabled before enabling PayPal payments for your Autoship customers.
Pro Tip! If you want to test this functionality in your PayPal Developer Sandbox, you will also need to request that PayPal support enable this for your sandbox as well.
Request PayPal support to "turn on Reference Transactions"
Call or email PayPal support and request that they enable "Reference Transactions" on your PayPal business account. You may be asked to confirm your PayPal business account information (like email address) in order for the request to be processed.
You should receive an email confirmation for Reference Transactions within 24-48 hours from PayPal.
"Reference Transactions" versus "Billing Agreements"
Reference Transactions are the PayPal business account feature that enables your business to perform flexible, recurring billing when your customers agree for you to bill their PayPal account.
Billing Agreements are the PayPal customer account feature where customers opt-in to an agreement at checkout that your Business can use their PayPal account as a saved payment method for recurring billing.
In summary, if your PayPal business account is enabled for Reference Transactions, then you can perform flexible, recurring billing against the Billing Agreements that your PayPal customers create at checkout.