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What does PayPal error "Invalid Merchant Configuration" mean?

This means that either your PayPal account is not configured for Website Payments Pro, or the setup process is not yet complete. It can take several days for PayPal to approve you as a new Website Payments Pro merchant.

As discussed in the question When will PayPal API XYZ Standard be supported? above, a "regular" PayPal account is not sufficient to use this program, as it will not allow Direct Payment.

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