PayPal Parellel payments and refunds - php

Question

I have a question regarding Parallel payments and refunds. We are developing an application that sets up a Parallel payment, with ourselves as the My Store receiver and the provider of the service as the seller receiver. We provide a mechanism for the secondary receiver to refund the complete payment.
(source: ohozaa.com)
What we want to know is what happens when the seller receiver has no funds in their paypal account? From testing this in the sandbox and from what we've read, it seems that the seller receiver component of the refund becomes pending (we assume, as funds are pulled down from an associated bank account). Three things:
Has the My Store receiver paid the refund in full and is now waiting to get the payment from the seller receiver. Implying that, at this point in time, the My Store receiver is out of pocket?
What happens if funds cannot be pulled down from the seller receivers associated bank account?
What happens if we attempt a refund from an unverified user with no funds in their paypal account? Once again, does the My Store receiver pay the refund in full and hope to collect the seller receivers portion when they do have funds?

Answer 1

Unless I am misunderstanding the situation there are three possible questions/outcomes.
You submit a payment to pay mystore#test.com 10 dollars and seller1#test.com 90 dollars for a total of 100 dollars:
https://svcs.sandbox.paypal.com/AdaptivePayments/Pay
'currencyCode' => 'USD',
'actionType' => 'PAY',
'receiverList.receiver(0).email' => 'mystore#test.com',
'receiverList.receiver(0).amount' => '10',
'receiverList.receiver(1).email' => 'seller1#test.com',
'receiverList.receiver(1).amount' => '90',
'requestEnvelope.errorLanguage' => 'en-US',
buyer#test.com wants a refund:
1) If you have API permission to submit refunds for seller1#test.com you can refund his part of the transaction as well as yours. You do this by passing the receiverList variables:
https://svcs.sandbox.paypal.com/AdaptivePayments/Refund
'payKey' => $thepaykey,
'receiverList.receiver(0).email' => 'mystore#test.com',
'receiverList.receiver(0).amount' => '10',
'receiverList.receiver(1).email' => 'seller1#test.com',
'receiverList.receiver(1).amount' => '90',
'requestEnvelope.errorLanguage' => 'en_US',
'currencyCode' => 'USD',
1.1) mystore#test.com and seller1#test.com both have the funds, they are refunded immediately.
1.2) mystore#test.com has the funds, but seller1#test.com does not. An eCheck is submitted from seller1#test.com's bank account to pay for the refund, and the status will be PENDING until it clears from the bank. mystore#test.com has only paid buyer#test.com 10USD. buyer#test.com will have two transactions, one for 10USD that is completed, and one for 90USD that is pending. If the 90USD transaction fails, PayPal will try a second time to represent to the bank. If it fails again, seller1#test.com's transaction should go into a FAILED status and may not be refunded via the transaction. The only way to refund this transaction would be to do a send money.
2) If you do not have API permission to submit the refunds for seller1#test.com you will not be able to pass his receiver in the request. If you do, the whole refund will fail. You cannot exceed the amount you were originally paid (10USD)
3) If the seller1#test.com is not confirmed, or does not have an account created in paypal/sandbox, the transaction will be PENDING , and while it is pending the buyer can click cancel next to the transaction. You may also cancel the transaction before it shows COMPLETED by submitting a refund for their amount.
If this was a chained payment it may have a different outcome.