What happens if I don't have enough money in my PayPal account

[ricomichel]

Hello,

I have some money in my PayPal account, but not enough to cover for a payment that I need to make. I have some more money in my bank account that is linked to Paypal, but again not enough to cover said payment.

So I'm wondering if PayPal will first take the money from my PayPal account (i.e. empty it), and then take the rest of the money from my bank? Or will it send the whole payment directly to my bank account? I need to know this to make sure I don't get an "insufficient funds" notice from my bank, and the high penalty that goes with it.

Thank you!

Rico

[sharpiemarker · Accepted solution]

@ricomichel 

Split payments can only be done with PayPal balance and credit card as back up so if you don't have enough in your PayPal balance and don't have a card linked, the entire amount could be taken from your bank account resulting in insufficient funds. Either add funds to your PayPal account or withdraw your PayPal balance to your bank account so it is enough to cover the transaction. Withdrawing to bank could be the faster of the two options and then just paying with bank account. Also read the following for more information on payment methods. 

Selecting a preferred payment method

You can choose any of the payment methods in your PayPal account as your preferred payment method.  You can select a preferred payment method in your account preferences on www.paypal.ca or in the PayPal app. There may be times when your preferred payment method cannot be used, for example, if you select a credit card that is expired.

You can set separate preferred payment methods for online transactions, in-store transactions and automatic payments with a seller.

If you have chosen a preferred payment method, it will be shown as the primary method of payment. If you have not chosen a preferred payment method, it’s still your choice.

The availability of certain payment methods may be limited based on that particular seller or the third party website you are using to complete the transaction. 

If you have not selected a preferred payment method, or your preferred payment method is unavailable, we will show you available payment methods, including the payment method you used most often or most recently, at the time of transaction.  You can also click on the “Manage” link to see all of your available payment methods, or add a new one, and select a payment method during the transaction.

Backup payment method

Certain one-time online transactions may require that a backup funding method be used in the event that your selected or preferred payment method is unavailable. In those instances, the backup funding method may be displayed to you on your transaction review page, before you complete the transaction.  Note that this only applies for one-time, online transactions, and not for in-store or automatic payments. If PayPal determines currency conversion is necessary for a transaction that also requires a backup payment method, you may not be able to separately choose whether PayPal or your card issuer performs the currency conversion on your backup payment method.

[ricomichel]

Thank you for your much detailed answer. I will try and resolve the situation and get back to you after. Thanks! — Rico

[ricomichel]

Hello Sharpie,

So I did like you suggested and set PayPal as my preferred payment method, then I went ahead with the transaction. My PayPal account was emptied and then, 1 1/2 day later, the balance was debited from my bank account. Exactly like I wanted! 

So thank you for your help! Keep it up!

Rico

[Budd1]

Thanks @sharpiemarker  I think you've answered my question but I'd to make sure since I'm wanting to do something slightly different.

I buy gift & store cards from my grocer to collect fuel points to lower my $/gal costs. I use the cards to purchase items I'd normally use cash or credit cards for. After using the Visa/MC/Amex cards for purchases I usually have amounts on them to small to cover future purchases by themselves. If I were to add them as a Paypal account, set them as the primary and make a purchase for more than that card amount, would Paypal then pull from my bank account or credit card as a backup for the balance due?