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PayPal Webhooks

How to Test PayPal Webhooks Locally (2026)

PayPal sends webhooks for payment, order, subscription, and dispute events. Unlike most providers, PayPal does not use a shared HMAC secret — it signs each webhook with an RSA certificate (SHA256withRSA), which you verify either by downloading the cert from the Paypal-Cert-Url header or by calling PayPal's verify-webhook-signature API.

With HookSense, point PayPal at a callback endpoint and let an AI agent await the result over MCP: create_callback_endpoint → wait_for_callback → verify_signature. Run npx @hooksense/mcp in Claude Desktop, Cursor, or any MCP client. No polling.

Signature Header

Paypal-Transmission-Sig

Algorithm

SHA256withRSA (cert-based, not shared-secret HMAC)

Setup Guide

  1. 1Create a free HookSense endpoint at hooksense.com
  2. 2Copy your unique webhook URL (e.g. https://hook.hooksense.com/w/abc123)
  3. 3In the PayPal Developer Dashboard → Apps & Credentials → your app → Add Webhook
  4. 4Paste your HookSense URL and select the event types you want to receive
  5. 5Trigger an event with the Webhooks simulator or a sandbox transaction
  6. 6Watch the webhook — including all Paypal-Transmission-* headers — appear in HookSense in real-time

Common PayPal Webhook Events

PAYMENT.CAPTURE.COMPLETED
PAYMENT.CAPTURE.REFUNDED
CHECKOUT.ORDER.APPROVED
CHECKOUT.ORDER.COMPLETED
BILLING.SUBSCRIPTION.ACTIVATED
BILLING.SUBSCRIPTION.CANCELLED
BILLING.SUBSCRIPTION.PAYMENT.FAILED
CUSTOMER.DISPUTE.CREATED

Forward to Localhost

Use HookSense CLI to forward PayPal webhooks directly to your local development server:

npx hooksense listen -p 3000 --path /api/integrations/paypal

No ngrok or tunnel setup required. Install with npm i -g hooksense or use npx.

Tips & Best Practices

  • PayPal uses RSA cert verification, not a shared HMAC secret — verify against the cert at Paypal-Cert-Url or call POST /v1/notifications/verify-webhook-signature
  • HookSense captures all five Paypal-Transmission-* headers so you can debug verification failures
  • Use the PayPal Webhooks simulator to fire test events without a real transaction
  • Sandbox and live events hit the same endpoint — use HookSense search to tell them apart

Related

PayPal Webhook Documentation PayPal webhook tester — send sample events HMAC signature calculator
Webhook SignatureRaw Body2xx ResponseIdempotency

Give your agent a PayPal callback

Create a free callback endpoint and have an agent await its first verified PayPal webhook over MCP. Paid plans are early-access.

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