To test an account that has the PayPal Account Optional feature turned on, you must have a business PayPal account in Sandbox.  

1. Create a PayPal business Sandbox account. 

2. Initiate checkout by clicking your PayPal button or completing the third-party checkout on your site. If your checkout isn’t already configured for Sandbox, enable your shopping cart for test mode. Please consult your third-party provider for Sandbox (test) environment enablement.
   Note: You’ll see one of two checkout pages, depending on whether you have login cookies stored on your machine. If you don’t have a login cookie, the page will request credit card information immediately. If you have a login cookie, you’ll see a login option on the right and a Continue link on the left. Click Continue to get to the credit card information entry page. 

3. Click Add a Card and enter your dummy credit card information with the following requirements: 

• The first and last names must contain letters only

• The address must have a city, state, and ZIP code

• The expiration date must be the current date or a future month and year

• The CSC or CVV can be any three-digit number

• To create multiple test credit card numbers, use the Credit Card Generator

4. Click Review Order and Continue.

5. Select Pay on the Make Your Payment page to complete the test.

See also: 
PayPal Sandbox Testing Guide