Knowledgebase
How to set up a PayPal Sandbox account
If you want to test your store and make a few example orders and money transactions, you can create a PayPal Sandbox account. This sandbox account is used only for testing and all the transactions made through it are not with real money.
To create a PayPal Sandbox account, go to the developer section of PayPal's site, click on the Sign Up Now button, provide all the necessary information and follow the instructions to complete the registration. After you log in to your new PayPal Sandbox account, create two preconfigured test accounts. One for seller (business) and one for buyer (personal). Don't forget to add some money to the buyer account, so that you can use it later to make some test orders on your site, and also to copy the passwords for the two accounts.
From your PayPal Sandbox account you can also get test API credentials which you can copy in your site's admin panel (System>Configuration>PayPal>API/Integration Settings panel). Don't forget also to turn the Sandbox Mode to Yes inside the API/Integration Settings panel (or if you test Website Payments Standard enable the same option in the panel for that payment method).
It will be also useful to change a few options in the test business PayPal account. To access it, log in to your PayPal Sandbox account, click on Test Accounts, mark the checkbox for the business account and click on Enter Sandbox Test Site. A useful option you can configure in your PayPal test business account is to enable Instant Payment Notification. Go to Profile in your account, then click on Instant Payment Notification Preferences>Choose IPN Settings, set it to Enabled and in the field for Notification URL type the appropriate URL (e.g. http://yourstore.com/paypal/ipn). Then click on the Save button to save the changes.
Another useful option you can enable in the business account is the Auto Return for Website Payments. Go to Profile>Web Payment Preferences, set Auto Return to On and type the appropriate return URL address (e.g. http://yourstore.com/paypal/success).
After you are done with creating the test accounts and configuring any test account options (not obligatory), you can go to your store and make a few test orders and transactions. You have to log in to your PayPal Sandbox account before you begin.