I am testing on Sandbox and I have created an item on eBay Sandbox which requires immediate payment. When I try to purchase the item and go through checkout on PayPal Sandbox, I get the following error message:
Accounts cannot be linked.
This recipient is currently unable to receive money.
In order to be able to complete checkout, the seller's PayPal account needs to be verified and confirmed.
When you create your PayPal Sandbox account on PayPal developers website , use the tool "Create a preconfigured buyer or seller account" that can be found in the section "Test Accounts". This will ensure that the account has all the correct settings.
If you need to create the account manually, then ensure that you confirm the email address before you try to purchase the item.