PayPal 
1Log in to your PayPal account
2Click on the Profile subtab
3Click on the Instant Payment Notification Preferences link in the 'Selling Preferences' column
4Click Edit

You should now be presented with a screen containing the following:

Setting callback URL

Note:
If the Instant Payment Notification link is not present you will need to apply for Premier Account or a Business Account from PayPal.
Check the checkbox to activate Instant Payment Notification and enter the following URL below the checkbox.

http://www.example.com/forums/payment_gateway.php?method=paypal

Click [Save]
5Go to Paid Subscriptions > Payment API Manager > PayPal in your AdminCP where you will be presented with the following screen:

PayPal Settings

6Enter your PayPal email address in the PayPal email field. This does not need to be the primary email address for your PayPal account and can be any email address associated with your PayPal account that you wish to use for payments received from your forum.
7If you wish to use recurring subscriptions, you also need to enter your primary email address for your PayPal account in the PayPal Primary Account Email field.

Your completed PayPal page will then look like either

Setting PayPal Emails

where the PayPal email address used for your forum is the same as the primary email address for your PayPal account, or

Setting PayPal Emails

where the PayPal email address is different to the primary email address for your PayPal account.
8Finally, to activate the PayPal API for paid subscriptions, change the Active setting to Yes.
ConqSoft 31st Dec 2005, 12:55am
The PayPal IPN no longer needs to be set, since it's sent with each payment. This section of the manual needs to be changed/removed.
Chris 06th Nov 2012, 02:21pm
The Paypal IPN may not be required for vB, but Paypal requires you to enter a URL in order to have IPN active. So you must enter something in the URL field.