Instant Payment Notification
Instant payment notification (IPN) is a way to allow online retailers to handle real-time purchase confirmation and server-to-server communication. This allows the retailer to store transaction or order information in its own database to track its own sales data internally.
PayPal notifies a specified URL by an HTTP POST method, the URL should point to an IPN script that should process payment notifications. The first thing that must be done in the script is to validate the notification with PayPal.
The following Image should Illustrate how IPN works:
Read more about Instant Payment Notification: Distributing Goods
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