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I've tried to read up on this, but the information I found only got me more confused.

PayPal refuses to work on my Magento installation. I have called their support and they told me that there is no request to the PayPal servers. So I assume the issue is local.

Does PayPal need encryption to be enabled on the server hosting the shop?

Is there anything else that could stop PayPal in its tracks before even reaching their servers?

This error is logged in exception.log:

exception 'Mage_Core_Exception' with message 'PayPal NVP gateway errors: Array Correlation ID: . Version: .' in /is/htdocs/xxx/xxx/app/code/core/Mage/Paypal/Model/Api/Nvp.php:1062

This is what it tells me when I try to check out with PayPal Express:

PayPal gateway has rejected request. Method Specified is not Supported (#81002: Unspecified Method).

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PayPal Express comes with Magento right out of the box. The only thing you need to take care of is that the php setting arg_separator.output is set to &, otherwise the PayPal Server will not even look at your request.
Many Webservers already have it set up like this, however WAMPP (which my hoster appears to be using) does not.

In my opinion, the cleanest way to do this is to add the following to the .htaccess in the Magento root.

# needed for paypal api url bug with &
php_value arg_separator.output "&"

However, you can also just change your php.ini to apply this adjustment globally.

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