Instant Payment Notification (IPN) is an integral part of PayPal configuration and you need to know the intricacies of IPN in order to configure PayPal correctly.
IPN is a PayPal interface or mechanism that automates certain aspects of your business by posting transaction details to your server, whenever you receive payment or a status change occurs on the transaction.
The various features of IPN are as follows:
IPN is used for silent communication with your site. 'Silent communication' means that PayPal sends requests to your site while user is still on PayPal site. Thus, subscription is created before user returns to your site. If you turn IPN off then subscription created at the moment user returns from PayPal.
IPN is required for recurring payments. Therefore, you must enable IPN, if you enable User Recurring Payments option.
Depending on server location, IPN may fail. In that case turn it off and also turn off recurring payments option.
All links to your website content should be public because if the links are registered then IPN may fail to communicate as authorization will be required.
To configure the PayPal plugin:
1. Install the PayPal plugin. In order to install the PayPal plugin, refer to Installing Payment Processor Plugins.
2. Edit the PayPal plugin using Plugin Manager. Editing the plugin involves specifying plugin parameters, such as PayPal email, language name, and currency, and selecting whether your payments will be recurring or not. If you choose to make payments recurring, you may specify few more parameters, such as initial price and initial period. For more information on editing plugins, refer to Editing Plugins.
Parameters you set in PayPal plugin using Plugin Manager are used as default parameters for PayPal plugin when a new plan is being created. However, those parameters can be changed inside each subscription plan. Thus each subscription plan can have different PayPal settings.
3. Create your PayPal account by navigating to www.paypal.com and clicking the Sign up link.
4. Visit www.paypal.com and log into your account using valid credentials.
5. Go to the profile section and click the Instant Payment Notification tab.
6. Enable IPN and enter the IPN URL, such as homepage of your site or any other site. However, the URL must include index.php. For example, http://mightyextensions.com/index.php.
It is not important what URL you enter because PayPal plugin will create and pass new IPN URL to PayPal for every new order.