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Integrating PayPal Into a Shopping Cart Checkout System

Integrating PayPal into a checkout system can be done in a variety of ways. One of the most effective ways is to implement IPN.

Instant Payment Notification (IPN) is a message service that notifies you of events related to PayPal transactions. You can use it to automate back-office and administrative functions, such as fulfilling orders, tracking customers, and providing status and other information related to a transaction.

What is IPN?

IPN notifies you when an event occurs that affects a transaction. Typically, these events represent various kinds of payments; however, the events may also represent authorizations, Fraud Management Filter actions and other actions, such as refunds, disputes, and chargebacks.

IPN is a message service that PayPal uses to notify you about events. These events include the following:


  • Instant payments, including Express Checkout and direct credit card payments

  • eCheck payments and associated status, such as pending, completed, or denied

  • Payments that may be pending for other reasons, such as those being reviewed for potential fraud

  • Events related to recurring payments and subscriptions

  • Authorizations, which indicate a sale whose payment has not yet been collected

  • Chargebacks, which are initiated by a credit card processor; for example, when a customer disputes a charge

  • Disputes, which are initiated by a buyer using the PayPal resolution process

  • Reversals, which occur when you win a dispute or a chargeback is canceled

  • Refunds, which you may choose to give

In many cases, the action that causes the event, such as a payment, occurs on your website; however, your website is not the only source of events. In many cases, events can be generated by Website Payment Standard buttons, the PayPal API, or by PayPal itself.

You detect and process IPN messages with a listener, sometimes called a handler, which is a script or program that you write. It waits for messages and passes them to various back-end or administrative processes that respond the messages. PayPal provides sample code that you can modify to implement a listener that detects IPN messages.

The actions to take when your listener is notified of an event are specific to your needs. Examples of the kinds of actions you might take when your listener receives an IPN message include the following:


  • Trigger order fulfillment or enable media downloads when a check clears or a payment is made

  • Update your list of customers

  • Update accounting records

  • Create specialized “to do” lists based on the kind of event

We have done this on some of our shopping cart sites.

Full details on IPN can be found here.

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