one reason why paypal might be rejecting your credit card

I use PayPal all the time to make online purchases. I find it very very convenient.

A number of my clients use it to collect payments on their websites because it is free to join, the fees are comparable to other merchant services and your customers no longer need a PayPal account to make a purchase or pay an invoice with PayPal. It is a great option for letting people pay you online.

Several weeks ago, a client of mine called because one of her customers kept having their credit card declined by PayPal and she wanted to know what could be the matter. We did some sleuthing. I called the PayPal customer service number (888-215-5506), but since the difficulty didn’t happen with a transaction on my PayPal account they couldn’t check the logs. When my client called, they were able to look at the error logs and we found out why the credit card would not go through.

AND it wasn’t for all your normal reasons like the billing address doesn’t match the credit card address or the card is maxed out. It was for a reason that never would have occurred to me.

When you go to check out with PayPal, there is an option to not check out with a PayPal account (see image below).

The reason why the customer’s credit card was being rejected was because the customer had a PayPal account with that credit card number recorded in it. However, the customer didn’t realize that they could pay by credit card logging into their PayPal account, or for some reason wanted not to log into their PayPal account, so they had clicked on “Don’t have a Paypal account” option and were trying to pay outside of their PayPal account.

PayPal assumes that if a credit card number is in someone’s PayPal account, and then a charge is run through on the same number but not through the PayPal account, there may be fraud involved. The card might have been lost or stolen.

If you have a PayPal account, the option “Don’t have a PayPal account” will not work unless you use a credit card number that is not associated with your PayPal account.

PayPal defaults, I believe, to extract payments from the bank account that you have on file. If times are lean and your bank account is feeling anemic, then you may hesitate to use PayPal for purchases. It is very very easy, however, to change the payment method for a purchase once you’ve logged into your PayPal account.

When you log into your PayPal account to make a purchase, there is a link to change your payment method.

When you click the change link, you can then select to pay with your credit card on file.

In conclusion, if you have a credit card on file with PayPal, and want to make purchases with that credit card, you need to do it by logging into your PayPal account and selecting it as a payment method. If you try to use it without logging into your PayPal account, chances are it will be declined.

12 thoughts on “one reason why paypal might be rejecting your credit card

  1. pinky

    Thank you for this post. It help’s a lot. It made me realize that the importance of simple log-in instructions such as mentioned above, which we sometimes take for granted, just so that we can log on faster. I guess when doing financial transactions online, it pays to carefully read and follow instructions to avoid further inconvenience.

  2. BumbleB2na

    Thank you for this. Sure makes testing hard. I find the error messages PayPal’s payment page gives you when you try and bypass the log in to be really misleading. It makes me wonder if PayPal does not want to give away too many hints when something goes wrong.

    If you type in an incorrect year it says something along the lines of, “card was denied” if you try to submit it. But hey, if I enter in a bogus year that is too far in the past or the future to be accepted, I would appreciate a little indicator. Likewise, if I enter in a card number that is attached to a PayPal account, I don’t see the harm in showing that in an error message, either.

  3. BumbleB2na

    Another thing to consider.. Somewhere in the options when setting up a business PayPal account, you can specify that you want to deny VISA or MasterCard. I’m not sure if it can be switched manually in the settings. If you phone PayPal support, they should be able to see this and adjust the setting.

  4. Anuj

    Hi Heather,
    Thanks for the info. I have the kind of issue though a bit different. Payapl suddenly deactivated my visa card attached with my paypal account and applied limitation over it. The paypent that my client sent is stick to the paypal account itself and hasn’t been sent to the associated bank account. what could be the valid reason of paypal deactivated the active card?

    All the Suggestions will be appreciated!


  5. Kimberlee

    Thank you so much for posting. This has been driving me crazy! Nice to finally get the answer, and it just reaffirms why I never use Paypal or Bill Me Later anymore. I’ve never had anything but problems.

  6. Sher

    Thank you very much for writing in details. This helped me a lot. I created a payment button for one of my clients and the client did the same as you have mentioned in the first snapshot. He had an account in PayPal, though he tried making payment directly rather than by logging into the PayPal website.

    He showed me similar message of payment declined by PayPal for the visa card he had mentioned.

    After reading your helpful post, I told him to do accordingly and the payment was ungracefully done.

    Thank you again for making me feel satisfied.

  7. jacqui

    Thankyou soo much for your information… I have spent days trying to work this out as I wanted to pay for something out of my biz cc. I went into my paypal site and sure enough there were my cc deets.. Whew thanks again 🙂

  8. RJ

    Apparently this is not the case anymore. Someone just used my card number to charge a fraudulent transaction to my credit card using Paypal Guest Checkout, yet this card is assigned to my PayPal account.

    Paypal fraud support told me this is an “old scam”, All a fraudster needs is the card number, 3 digit security code from the back of the card, and the billing address and any charge can be put through using PP Guest Checkout. Honestly I don’t care about the convenience of this feature, this is a huge security risk and should be disabled immediately.

  9. Uniq

    The opposite thing is happening to me. I am attempting to pay via Paypal (Paypal balance selected), and I get the error that my credit card is rejected and I should try a different card or Paypal!!

  10. John Borthwick

    Do you get charged from PayPal if you haven’t enough funds in and it tells you card declined? Tried to get couple things today but didn’t have enough funds, when I realised I ordered less and was exepted it worked ok, just wondering if they charge for trying? Thank you

Leave a Reply

Your email address will not be published. Required fields are marked *