PayPal: Why is my Prepaid Business Debit MasterCard showing up or being processed as Credit Card instead of Debit Card?

Trying to link your debit card on PayPal, but it keeps saying it’s a credit card?

Or are you trying to add or use your PayPal debit card on a merchant’s website, but you keep getting this error?

This card number appears to be a credit card. Please enter a valid debit card number or select credit to use this card.

Whatever the case may be, the answer to your question is simple and can be found in the PayPal Business Debit Mastercard® Cardholder Agreement:

Please note that merchants ultimately determine whether to process your Debit Card payments as credit or debit transactions, and PayPal has no control over the merchant’s selection.

Section 7b-3.

That’s not all, though. If you opted for PayPal’s Standard Cash Back Benefit Program, then you’ve fallen deeper into the rabbit hole (metaphorically speaking):

Your Debit Card purchase must be authorized as a credit transaction and processed via Mastercard. Some merchant locations offer you the option of choosing “Credit” or “ATM/Debit” when making a purchase. To qualify for cash back, you must choose the “Credit” option if shown at the merchant location.

Section 7a-1.

Perhaps forgoing the activation of PayPal’s Standard Cash Back Benefit Program next month will help mitigate your problem of merchants unilaterally processing your Prepaid Debit MasterCard as a credit card.

Another incentive to quit using PayPal Cashback Mastercard and PayPal Extras Mastercard can be found in PayPal’s CASHBACK MASTERCARD® REWARDS TERMS AND CONDITIONS:

… The Program is provided by Synchrony Bank, the issuer of the Card Account. /

… You consent and authorize Synchrony Bank and any of its subsidiaries and affiliates or any non-affiliated third parties with whom they contract to manage the Program, to share information about you and the Program with PayPal and, as necessary, to effect, administer, enforce, service, or fulfill the terms of the Program. /

Synchrony Bank reserves the right to add, modify or delete any benefit, service or feature of the Program at any time in its sole discretion. Changes to the Program may include, among other things, modifying Eligible Purchases, excluded transactions or imposing additional restrictions or terminating the Program. Synchrony Bank reserves the right to remove any participant from the Program in the event of fraud or abuse in connection with the Program.


Synchrony Bank, formally known as GE Capital Retail Bank (GE Capital), instigated the federal government’s largest credit card discrimination in history.

In 2014, Synchrony Bank was ordered to provide an estimated $225 million in relief to consumers who had been harmed by its illegal and discriminatory credit card practices.

In response to GE Capital’s subjugation of consumers in deceptive marketing practices, it was ordered to refund $56 million to approximately 638,000 consumers.

Both the Consumer Financial Protection Bureau (CFPB) and the Department of Justice also compelled GE Capital to provide an additional $169 million to 108,000 borrowers for excluding them from debt relief offers on account of their national origin.

GE Capital changed its name to Synchrony Bank on June 2, 2014.

Lesson of This Blog Post

Completely opt out of PayPal’s Cash Back Benefit Program so you can avoid Synchrony Bank (GE Capital) and mitigate unforeseen issues with your PayPal Prepaid Debit MasterCard.

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