To test payments with PayPal, you will need to set PayPal to Sandbox mode in HBook > Payments. When the Sandbox is used, it processes fake payments with a fake PayPal store.
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Sandbox API credentials are to be entered as you can not use the same API Credentials (Username, Password and Signature) for Live and Sandbox payments.
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To obtain Sandbox API, you need to create a Sandbox account. It is free and can be done at developer.paypal.com.
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Learn more about test accounts with PayPal here.
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