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The docs should be of some use:

Mail Type - WHMCS Documentation


Choose how emails are sent by your installation:


1. Use PHP mail() function to send emails from inside WHMCS. This requires no further configuration, but some email providers may treat email sent this way with increased suspicion.

2. SMTP uses your SMTP server to send emails, it has lower performance, but is generally seen as less likely to be spam. The related "SMTP" fields below it are required.

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