Your PayPal account needs to support IPN notifications, but no API keys are required.
From a user perspective:
- They add items to their cart
- They view their cart
- Accept license terms (if applicable)
- Checkout
- Redirected to PayPal
- PayPal lists the product details and cost.
- User logs into PayPal and makes payment.
- User goes back to your site.
The payment process is usually instantaneous, if that's the case they can go straight to their Licenses page (a menu item shows up that says Active Licenses or Inactive Licenses). If a product requires activation they first need to provide a name and URL before downloading. If not, they can download it immediately. Sometimes payments aren't instant, so they will just wait for the confirmation from PayPal and the Product Manager add-on that the order is complete (the order is only complete once the payment is marked as Completed by PayPal).