Instant Payment Notification (IPN) allows you to automate certain aspects of your business by posting transaction details to your server whenever you receive payment or whenever a status change occurs on a transaction. When used with a credit card or Express Checkout transactions, IPN is not useful to get the status of a payment, but only to get asynchronous notification such as an eCheck clearing or a chargeback.
When a customer pays you, payment gateway posts a notification to your server at a URL you specify. Included in this notification are all of your customer's payment details (eg. customer name, amount) as well as a piece of encrypted code. The variables included in the notification are listed in the IPN Variable Reference. These variables are different for each payment gateway.