Buy Now Buttons
The Merchant creates Buy Now buttons on the PayPal website which provides simple HTML code to be built into the Merchant's website - one button for each product or service.
Express Checkout - typical scenario
The Merchant's website provides a link to processing pages hosted by the PayPal website. The code behind this link can transfer data such as the Merchant's PayPal ID, an order reference and details of the products or services being sold.
The purchaser is presented with PayPal's account-holder login page, and logs in to confirm use of his/her PayPal account, or
the purchaser is presented with PayPal's credit card processing page, enters the required data and submits the form.
The PayPal website processes the transaction and returns the purchaser to the Merchant's website, normally with a message that the transaction was successful.
The Merchant's website can then generate a purchase receipt and continue to expedite the order.
Since the Merchant's website does not collect credit card data, the Merchant does not have to deal with PCI-DSS Compliance.
Website Payments Pro - typical scenario
The Merchant's website hosts its own credit card data collection software and can store the data in secure client accounts for convenient later re-use. The Merchant's website and business operation require PCI-DSS Certification.
The Merchant's website makes a server-to-server connection with the PayPal website to actually process the transaction. This process is invisible to the purchaser, whose browser stays on the Merchant's website for the duration of the procedure.
PayPal returns a success-or-failure message, and the Merchant's website can continue to expedite the order accordingly.