PayPal is available as a payment method in Kustom Checkout (KCO). This guide covers how the integration works, what is handled by Kustom vs. PayPal, and how to get started.
Kustom's standard payment method offering covers four layers of the payments stack. When PayPal is the payment method, the ownership is split between Kustom and PayPal:
| Layer | Managed by |
|---|---|
| Checkout (end-to-end checkout process) | Kustom |
| Order Management (captures, refunds, cancellations via API or portal) | Kustom |
| Settlement & Reporting (payouts, reconciliation, financial reporting) | PayPal |
| Disputes (evidence submission, response workflows, resolution) | PayPal |
You manage orders, captures, refunds, and cancellations and other order management actions through Kustom, exactly as you do for other payment methods. Settlement and financial reporting is accessed through your PayPal merchant dashboard. Disputes on PayPal transactions are managed through PayPal's Dispute Center.
Transaction-level financial data and reconciliation for PayPal orders live in your PayPal dashboard, not in Kustom. Payout schedules and settlement timing follow PayPal's infrastructure. Your finance team will need to work with two reporting environments: Kustom for order data, and PayPal for settlement data.
Kustom passes the Kustom order ID to PayPal on every transaction. If merchant reference 1 (mref1) is available at the time Kustom captures against PayPal, it is passed in a separate field.
References are not updated retroactively. If you set or update mref1 after the order has been captured, it will not be propagated to PayPal. Use the Kustom order ID (always present on both sides) to connect transactions between Kustom and PayPal reporting.
If your workflow involves updating references after order creation, use the Kustom order ID as your primary reconciliation key for PayPal transactions.
Kustom's dispute tooling does not apply to PayPal transactions. The Disputes tab in the Kustom Portal shows which orders have active PayPal disputes and their current status. To respond to and resolve disputes, go to PayPal's Dispute Center directly. Response timeframes, evidence requirements, and resolution follow PayPal's rules.
Full functionality is available for PayPal orders, including the Order Report. You can view all PayPal orders, their statuses, and perform order management actions just like any other payment method.
PayPal transactions are filtered out from all settlement-related reports (transaction reports, settlement reports, settlement batch reports, and balance reports). Use your PayPal dashboard for PayPal financial data.
Shows which orders have active PayPal disputes and their current status. To manage and resolve disputes, go to PayPal's Dispute Center.
All endpoints are fully supported for PayPal orders. The standard order lifecycle (authorization, capture, cancellation, refunds) works identically to other payment methods.
PayPal transactions are filtered out from all settlement-related endpoints. Perform financial reconciliation for PayPal orders via PayPal's own reporting or dashboard.
Connect your PayPal account to Kustom to start accepting PayPal payments at checkout. The steps below take about 5 minutes.
Before you begin: You need an active, verified PayPal Business account in a supported market. Kustom does not provision PayPal accounts — if you don't have one, complete PayPal's onboarding and KYC process first. A link is available in the Kustom Portal.
The steps below cover the Playground (sandbox) flow. For production, the steps are identical — just use your Main PayPal Business account instead of a sandbox account.
- Playground: Link a sandbox Business Account related to your Main account, found in the "Testing" tab. Use one of the Personal accounts under "Testing" to act as the shopper.
- Production: Link your Main account directly.
Log in to the Kustom Portal and go to the Home page. You'll see a card labelled PayPal onboarding in the top section. Click it to start the connection flow.
Make sure you're viewing the correct store from the store selector before starting. The PayPal connection is per store.
You'll be redirected to PayPal to authorize the connection. You need to log in with your sandbox business account. To find those credentials:
- Go to developer.paypal.com/dashboard
- In the left menu, click Testing Tools → Sandbox Accounts
- Find the account with Type: Business
- Click the three-dot menu (⋯) and select View/Edit account to reveal the password
On the PayPal page, enter the email and password of your sandbox business account and complete the authorization flow. Follow any prompts PayPal shows — this links your PayPal merchant account to Kustom.
Make sure you log in with the Business type account, not the Personal one. Both appear in the sandbox accounts list.
After authorizing, you'll be redirected back to the Kustom Portal. Open the PayPal onboarding card again — it should now show your store name and Merchant ID with a status of Completed.
If you see a different status or an error, close and reopen the card, or try the flow again from step 1.
Once the connection is confirmed as Completed, reach out to your Kustom contact and let them know. We'll enable PayPal as a payment method in your checkout configuration.
Share your store name and the Merchant ID shown in the card (e.g. PM00477018). This lets us match it to the right store quickly.