
Merchant User Manual and Integration Guide May, 2005 103
Backend Integration - Payment Notifications
Instant Payment Notification (IPN)
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Instant Payment Notification (IPN)
PayPal’s Instant Payment Notification (IPN) allows you to integrate PayPal payments with
your website’s back-end operations. IPN provides immediate notification and confirmation of
PayPal payments you receive, allowing you to:
z Customize your website’s response to customer purchases in real-time.
z Track customers through the notification’s “pass through” variables.
z Automate your fulfillment operations.
z Store transaction information in your own database.
To activate Instant Payment Notification, you will need to go to your Profile to enter the URL
at which you would like to receive notification posts. Once you activate IPN, you will receive
an IPN when a payment is first sent which will state the status of the payment (Completed or
Pending). If the payment was “Pending,” you will receive another IPN when the payment
clears, fails, or is denied.
IPN can be seamlessly integrated with each of the PayPal Website Payments solutions (Buy
Now Buttons, PayPal Shopping Cart, Subscriptions and Recurring Payments, and Donations),
as well as with regular PayPal Send Money and Mass Pay payments, and lets you focus on
selling, not on manually tracking your orders.
How It Works
When a customer makes a payment to you or a payment is reversed or refunded, PayPal will
post a notification to your server at the URL you specified. Included in this notification will be
all of your customer’s payment information (e.g. customer name, payment amount) as well as
a piece of encrypted code. When your server receives a notification, it will then post the
information, including the encrypted code, back to a secure PayPal URL. PayPal will
authenticate the transaction and send confirmation of its validity back to your server.
After you have activated Instant Payment Notification, your server will be sent a notification
every time you receive a payment. This notification will be sent as a hidden “FORM POST” to
the URL you specified, and will include all of the payment information. The FORM variables
for these notifications are available in Appendix A of this manual.
NOTE: IPN will translate special characters into URL encoding format. For example, the
colon, ":", in http:// is translated to 3%A in the IPN post.
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