How PayPal works
PayPal lets your customers pay a sales order online. You send them a pay link from the order, they pay on a SKU.io pay page with PayPal, and the payment lands on the order by itself. This page explains the pieces behind that: how an account connects, what its page shows, what changes in Sandbox, where PayPal's fees show up, and how the money reaches your accounting provider.
Two ways to connect
A PayPal account connects to SKU.io in one of two ways:
| Way | Available | How it works |
|---|---|---|
| Your PayPal API keys | Now | You create an app on developer.paypal.com and paste its Client ID and Secret into SKU.io. It takes about five minutes. See Connect PayPal with your API keys. |
| Connect with PayPal | Coming soon | You sign in to PayPal in a pop-up and approve SKU.io. No keys to copy. |
Until Connect with PayPal arrives, a new account's Account tab shows this note at the top, before the API keys form:
Once an account is connected, the Connected with row on its Account tab reads Your PayPal API keys or Connect with PayPal.
Connect with PayPal is coming soon
Connect with PayPal waits on PayPal's approval of SKU.io as a partner. When PayPal approves it, the option appears for new accounts automatically. Switching an existing account over is optional, and you'll do it from its Account tab.
You can start with API keys today and switch later without losing anything. An API-keys account's Account tab has a Connect with PayPal section for this. For now it reads:
When the switch is ready, the account keeps its pay links and payment history.
The PayPal account page
Go to Apps & Integrations → All Integrations, find PayPal under Payment Processors, and open an account. The header shows the account's name, its status chips and the account actions. Below it, four tabs split up the account's work.
| Tab | What it shows |
|---|---|
| Account | How the account is connected, its environment, and its Connection Status checks. Connect, Re-check and Update API keys live here. |
| Pay Links | Every pay link sent from this account, whatever its status. The sales order shows only the links still open. |
| Transactions | PayPal's own record of this account's activity, imported every night and matched to your orders. Shows Gross, Fee and Net for each one. |
| Webhook Events | The instant updates PayPal sends SKU.io, such as a completed payment or a refund. Useful when a payment didn't reach its order. |
The header chips tell you where the account stands: Connected, Not connected or Disconnected; then Production or Sandbox; then Ready or Action needed. Every chip is described in the PayPal reference.
The account actions on the right of the header (Disconnect, and Rename and Delete account in the ⋮ menu) are covered in Check, update or disconnect a PayPal account. An account that has taken a payment can be disconnected but not deleted.
More than one PayPal account
You can connect several PayPal accounts, such as one per store or brand. Each one is a separate card on the PayPal list, with its own name.
- Each pay link belongs to one account. The customer pays into that account, and a refund goes back through it.
- Every tab is per account. The Pay Links, Transactions and Webhook Events tabs show only that account's activity.
- You choose the account when you create a link. When more than one account is Ready, the pay link dialog shows a PayPal Account field. It starts on the account the order's open link uses, or else the first account. With one ready account, SKU.io uses it without asking.
- Names can change. Use Rename in the ⋮ menu to correct or update an account's name at any time.
Sandbox and Live
PayPal gives every app two sets of keys: Live keys take real money, and Sandbox keys work in PayPal's test environment. When you connect with API keys, the Keys from setting tells SKU.io which set you're pasting.
The account then shows a Production chip (green) for Live keys or a Sandbox chip (orange) for test keys. Keep these points in mind:
- Keys must match the tab they came from. On developer.paypal.com, copy keys from the Live or Sandbox tab of Apps & Credentials to match your Keys from choice. PayPal rejects keys from the other tab.
- Only test buyers can pay a Sandbox link. A real PayPal account or card can't pay it. The pay page shows a Test payment (sandbox) notice so nobody mistakes it for a real charge.
- Sandbox payments still count on the order. A test payment is recorded on the sales order like a real one, so use a test order, not a customer's real order.
- Switching an account between Sandbox and Live cuts off old refunds. Payments taken under the old keys can't be refunded from SKU.io after the switch. To test and sell side by side, keep one account for each.
PayPal fees
PayPal takes its fee from each payment before the money reaches your PayPal balance. SKU.io records the full amount the customer paid as the payment on the order. It doesn't subtract the fee, so the order is paid in full.
You can see the fee in three places:
- On the order. Under the payment's amount on the Payments tab, as PayPal fee and the amount.
- On the Transactions tab. Each transaction has Gross, Fee and Net columns, and the totals at the top of the tab add them up.
- In a custom report. In the Report Builder, the Payments data includes the fee as Total Cost.
SKU.io doesn't post PayPal fees to its accounting entries or to QuickBooks or Xero. Record them in your accounting provider yourself, for example when you reconcile your PayPal account there. SKU.io also has no payout accounting for PayPal, unlike Shopify and eBay payouts.
PayPal payments in QuickBooks or Xero
A PayPal payment is a sales order payment, so it syncs to your accounting provider like any other. See Sync payments with your accounting provider.
SKU.io records every PayPal payment under the PayPal Payment payment type. That type appears in Settings → General → Payment Types as soon as you add your first PayPal account, so you can map it before the first payment arrives.
Map PayPal Payment like any other payment method:
- QuickBooks Online: on the QuickBooks integration's Payment Methods tab.
- Xero: on the Xero integration's Payment Methods tab, or the Payments step of Connect Xero.
Point it at the bank or clearing account you use for PayPal in your accounting provider. Map it before your first PayPal payment, so that payment has an account to post to.
What to expect:
- You can rename it. PayPal payments keep using the same type under its new name, and its mapping stays.
- You can't delete it once it's used. Like any payment type with payments, it stays.
- A type you made yourself is a different type. If you created your own "PayPal" payment type before, it stays separate. Payments you record by hand are ordinary manual payments, whatever type you pick. Only payments SKU.io receives from PayPal can use Refund via PayPal.
- The full amount syncs, the fee doesn't. See PayPal fees.
- A refund syncs too. A PayPal refund appears on the order as a refund credit that's already paid out, and it syncs as a payment against that credit.
For what each SKU.io entry becomes in your provider, see What syncs to your accounting provider.
PayPal compared with Stripe
PayPal and Stripe both sit under Payment Processors in Apps & Integrations, and both collect payment on a sales order. They work differently:
| PayPal | Stripe | |
|---|---|---|
| Ask for payment | Add Payment → PayPal Pay Link | Add Payment → Send Stripe Invoice |
| What the customer gets | A link to the SKU.io pay page | A hosted Stripe invoice |
| Who sends it | SKU.io emails it with your PayPal Payment Request email template, or you copy the link and send it yourself | Stripe emails the invoice |
| Refund from SKU.io | Refund via PayPal on the payment | Refund on the payment |
| How a refund appears on the order | A refund credit that's already paid out | A refund recorded against the payment |
| Payment type | PayPal Payment | Stripe Payment |
For Stripe, see Collect payment through Stripe.
Where pay links work
PayPal pay links work on sales orders only. You create them from the order's Payments tab. Elsewhere:
- Quotes can't take a pay link. Turn the accepted quote into a sales order first, then send the link from the order.
- Point of sale doesn't use PayPal. Card tenders at the register go through Square or Stripe. See Sell at the point of sale.
- Customer statements don't include a PayPal link.
- The Request Payment email in Receivables doesn't include a pay link by default. To include the order's active link, add the PayPal Pay Link placeholder to the Payment Request (Order) template; see Email template and placeholders and Chase a customer's overdue balance.