How To Setup PayPal on Woocommerce – Complete Guide

woocommerce paypal setup

WooCommerce PayPal checkout makes it easy for you, as a business owner, to receive payments from your customers, regardless of their location. If you run an eCommerce store, you need a means of accepting money from customers. While there are many options you could choose from, Paypal is often one of the top choices. Why? Most online shoppers use PayPal and have become used to the PayPal payment process. On your end, receiving payments through this platform is a seamless and secure process. In this article, you will learn about the Woocommerce PayPal setup. But first, we will need to create a PayPal sandbox.


  1. How to Create PayPal Sandbox Account
  2. Installing Paypal for WooCommerce
  3. Set Up PayPal for WooCommerce
  4. How to Generate Identity Token

How to create a PayPal Sandbox Account

Before deploying a PayPal payment gateway to your Woocommerce site, it’s needful to first test it to be sure everything works fine. Thankfully PayPal has an option for this: PayPal sandbox. So, in this tutorial, we shall create a sandbox account. We’ll be using it along the way.

Head over to PayPal’s developer section. On the far right corner, click Log into Dashboard

log into paypal dashboard

Upon click, you would be prompted to sign in (if you already have an account) or sign up. In this instance, we will be signing up.

Next, select an account category: Personal or Business. Personal PayPal accounts are for those who just want to send and receive money. Since you would be doing business transactions, choose a business account.

select paypal business account

Put in your email (personal or business email), set a password, and provide a descrip/tion of your business.

tell us about your business

Once you are done, submit your entry. The next screen you would see is this:click continue to payments setup

To link PayPal to your bank account, get a debit card for your business, etc. click Continue to Payment Setup. You can do that later, but for now, let’s integrate PayPal with WooCommerce.

Installing PayPal for WooCommerce

If you don’t have WooCommerce up and running on your WordPress website, go ahead and install WooCommerce and activate it now. This is done in the same way as every other plugin is installed and activated.

activate woocommerce plugin

With WooCommerce installed and activated, navigate to WooCommerce >> Settings

woocommerce settings

Next, click Payments.

woocommerce payments

Note: If you are using older versions of WooCommerce, you would see Checkout in place of Payments.

Scroll down to PayPal Standard, enable it by toggling the button to the left (usually disabled by default).

enable PayPal

Next click Set Up. The next screen you would see is this:

paypal integration

Yes! we have successfully installed and activated Woocommerce. Also, we have enabled PayPal. Let’s dive deeper into the WooCommerce PayPal setup.

WooCommerce PayPal Setup

In the Title section, put in the headline you would want customers to see on landing on your PayPal checkout page. A good title would be something like this: “Pay with PayPal”.

As for the description, put in the text that would be below the headline. Remember the email you used for opening your business account? Put it in the “PayPal emailsection.

Since we are still in the testing phase, check Enable PayPal Sandbox. Also, check Enable logging to capture all PayPal events on your site. Now let’s set up PayPal.

paypal setup on woocommerce

If you prefer to receive alerts in an email different from the PayPal email, put it in the Receiver email.

PayPal identity token offers a secure means to verify payment from customers without using PayPal native’s IPN (Instant Payment Notification). Also, with the identity token, you can keep track of all transactions, either ongoing or completed.

How to generate Identity Token

To generate Identity Token, log into your PayPal business account and click on the settings icon.


Next, on the left side of the page, under the Products and Services section, click Website Payments.

website payments on paypal


After that, click update website preferences.

update website preferences

Next, turn on Auto return.

auto return for website payments


Finally, turn on Payment data transfer, put the URL to your “Thank you page”, and save. You will see your identity token displayed on the screen. Copy and paste this in the “Paypal identity token” input box in your Paypal plugin setup page.

Finishing up The Setup

In the Invoice prefix section, type in your preferred prefix for your invoices. Using unique invoice prefixes is particularly needful if you are running more than one online store. A unique prefix could be something like this: “Business Shop”. Put in your business name in place of “Business”.

If you check the Shipping details checkbox, shipping details would be sent to your PayPal address, not billing address.

To prevent the address from being changed, check the Address override.

As for Payment action, you have two options: capture or authorize. If you chose to capture, payments from customers would be processed immediately without the need for verification. If you go for authorizing, payments will first have to be verified before being processed. As you may have guessed, the authorize option is heavily time-consuming.

The rest (Page style and Image URL) are optional.

paypal api

To process refunds, you will have to set up your API credentials. Head over to PayPal’s website to learn how to generate API credentials.

When you have your API details, input them and click Save changes.

To ensure the WooCommerce PayPal setup is working properly, we need to run a test purchase. This is where PayPal’s sandbox becomes handy.

How to Run a Test Purchase with PayPal Sandbox Account

First, ensure that Sandbox is enabled in the WooCommerce Setting (WooCommerce >> Settings>> Payments). Save changes.

enable paypal sandbox


If you haven’t created a developer account (same as sandbox account) yet, follow the steps in the first section of this article to do so. Now log into the developer account you just created, go to the ‘Sandbox’ section on the developer menu (on the left), and click Accounts. Next, click Create Account.

create sandbox account on paypal

What you would see next is this:

personal buyer account - woocommerce paypal setup

The country you chose doesn’t really matter. Select a Personal Buyer account. Type in an email (this is the email you would be using for the test purchase). For this tutorial, we shall be using “”. Put in a password. You can fill in or leave out first and the last name.

In the payment section, type in any balance of your choice, select PayPal as Payment Card. Then click Create Account.

create account - woocommerce paypal setup

In your Sandbox dashboard, you should see the newly created account.

sandbox account - woocommerce paypal setup


Now we’ve created a test buyer account to help us test our PayPal setup.

Testing our Buyer Account

Head over to your online store and make a purchase. As usual, add a product to the cart and proceed to checkout.

On the checkout page, fill in your normal billing details. Scroll down and click Proceed to PayPal. Just before the proceed button, you should see a dialog box telling you Sandbox is enabled.

proceed to paypal - woocommerce setup

Upon clicking the proceed button, you would be redirected to the sandbox account. Log in with the sandbox buyer email and password you had earlier created.

logging in to sandbox account

On the next page, accept terms and conditions. Finally, click Pay Now

pay now

That’s it! To be sure the order went through, log into your website, go to WooCommerce >> Orders. You should see the order you just processed.

Customer orders Woocommerce PayPal checkout

Now we have tested and verified that our WooCommerce/PayPal setup is working properly, we can now disable PayPal Sandbox. By so doing real users will be able to purchase from your store.

WooCommerce Paypal Checkout

WooCommerce PayPal checkout is a plugin that allows you to accept payments via PayPal on your checkout pages. To add it to your store, navigate to Plugins >> Add New. Then search for “WooCommerce PayPal Checkout”.

WooCommerce PayPal Checkout

Finally, install and activate the plugin. With WooCommerce PayPal checkout activated on your store, receiving payments from your customers via PayPal will become easier.


This is all you need to know about WooCommerce Paypal setup. Hopefully, you can now receive payments on your Woocommerce store. We did our best to make it as simple as possible, but if you missed something do get in touch.

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