PayPal Errors for Emails without a PayPal Account

Question

I'm building a site where one user can use PayPal to buy an item from another user. I want the money to go directly from one to the other while I just handle the IPN and the interface. I've set up the encrypted button to use cmd = _s-xclick and for the encrypted data: cmd = _xclick, business = the email of the seller and email = the email of the buyer. I'm having some issues completing the transaction. For example, User A has a PayPal account, User B does not. Both have an item being purchased by the opposite user. Clicking the "Pay with PayPal" button for User A (to buy User B's item) yields:

"The merchant is not a business or premier PayPal account. This feature is only enabled for a business or a premier PayPal account holder."

Clicking the "Pay with PayPal" button for User B (to buy User A's item) yields:

We were unable to authorize the transaction. Please contact your merchant.

1. I'm assuming the first message is because User B does not have a PayPal account, but I thought that PayPal will still accept the payment and hold it in a temporary account until that user signs up.
2. I'm also assuming that the second message is also because the buyer (in this case User B) doesn't have a PayPal account. But I thought PayPal would just give them the option to create one right there or use a credit card to make the payment.

Am I missing something (e.g. is there a different variable I need passed)? Or do I have to somehow confirm that a user has a PayPal account before allowing them to buy/sell an item.

PS: I'm pretty sure, but I'll have to confirm, that it works if both parties have PayPal accounts and the seller is a business/premium account.

Answer 1

This way is not a great solution because you have no way to check or guarantee that both parties have a PayPal account. I recommend using Adaptive Payments (Chain Payments). This will allow you as the PayPal account holder to run each transaction and it will send the money to the appropriate seller PayPal account, or e-mail them to let them know they have money waiting if they do not have a PayPal account, so that they can sign up and claim the money.

Answer 2

We recently began receiving this extremely unhelpful error message and we had to contact Paypal Merchant Technical Support. After much back and forth received the following response:

Unfortunately, we PayPal are facing some difficulties with encrypted button currently and our developer team is resolving this issue as we speak. In the meantime if you don't mind could you create a secondary email in your account then set it as primary, next regenerate the button again and test it out. For now this is the only work around they provided if you require to use encrypted button, give it a try and see if its worked, let me know if there's anything else you need, I would be happily assist you. Sorry for the inconvenience caused.

Tried that and it worked. It made me want to curse at someone, but it worked.