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Log in to the back end of your Joomla! site, and then go to the VirtueMart control panel:

components>virtuemart>list payment methods

Select the "PayPal" method and then ensure that check box next to "active" is checked.

Next, under the "configuration" tab, enter your paypal payment e-mail in the appropriate field.

Also, note that this is the same area where you can turn off the PayPal test mode (otherwise known as a sandbox).