Hi there Srikanth,
Have you worked through this.
What to set up in Paypal
- Setup your PayPal account at paypal.com
- Create a Paypal account if you don't have one
- Not required but recommended for selling: Upgrade your account to "Premier" status and get "Verified"
- Setup IPN in Paypal to interact with Moodle. Log into Paypal, go to Profile >> More Options >> Instant Payment Notification Preferences (under Selling Preferences) >> Choose IPN Settings. Enter a URL that references your IPN file in your Moodle installation (for example: http://moodle.example.com/enrol/paypal/ipn.php)
- Set the Encoding to UTF-8. In Paypal, go to Profile >> More Options >> Language Encoding (under Selling Preferences) >> More Options and set the Encoding to "UTF-8", select "Yes" to use the same encoding for data sent from Paypay to you, and save.