TLDR ; We are rolling out an important improvement to how payees connect their PayPal accounts when submitting expenses on Open Collective. This update affects all fiscal hosts that use PayPal to pay expenses. Payees must now connect their PayPal account instead of typing an email. Open Collective gets their verified identity directly from PayPal. Legacy PayPal accounts registered in the past are flagged as unverified. Hosts can see a new verified/unverified badge, PayPal identity details on expenses, and security check alerts for unverified accounts or name mismatches.
Background
Until now, payees who selected PayPal as their payout method simply typed in a PayPal email address. This created two problems:
- No proof of ownership. There was no way for Open Collective or fiscal hosts to confirm that the person submitting the expense actually owned the PayPal account they provided. This had KYC implications for hosts managing large volumes of payments.
- Risk of typos. A single character mistake in a PayPal email address would not be caught automatically, and could result in a failed or misdirected payment.
To address both issues, we have introduced PayPal OAuth-based account verification for expense payout methods.
What is changing for Payees
When a payee selects PayPal as their payout method for an expense, they are now redirected to PayPal to authorize Open Collective to confirm their account identity. Open Collective then receives their verified name and email address directly from PayPal.
Payees who previously saved a PayPal email address (before this feature was released) will see their payout method marked as unverified, with a prompt to reconnect it through the PayPal authorization flow.
What is changing for Organizations
You will notice two new things in your expense workflow:
1. PayPal verification status and identity information in the payee section
When reviewing an expense that uses a PayPal payout method, you will now see:
1. PayPal verification status and identity information in the payee section
When reviewing an expense that uses a PayPal payout method, you will now see:
- A Verified badge if the payee went through the PayPal authorization flow. You will also see the identity information received from PayPal: their name, email address, and country:
- An Unverified badge if the payout method was a legacy email entry without OAuth confirmation:
Note on country: The country field currently shows “Unknown“. We have a pending application with PayPal to gain access to the scope that provides this information. Once approved, the country will populate automatically for newly verified accounts.
2. New PayPal-related security checks
Expenses that use a PayPal payout method will now generate additional security checks visible in the Security Checks panel (the shield icon on each expense):
- PayPal account verified (green): The payee connected their PayPal account through the authorization flow and identity was confirmed.
- PayPal account unverified (red): The payout method was saved without OAuth confirmation. Consider asking the payee to update their payout method before processing payment.
- PayPal name mismatch (red): The name on the connected PayPal account does not match the legal name on the payee’s Open Collective profile.
What’s Coming Next
- Enforce verification. We are evaluating a platform-wide or configurable host policy that would require payees to verify their legacy PayPal account, configured before the introduction of this feature.
- Country information. Once PayPal grants the required scope, country will be populated automatically for verified accounts.