Answer:
Let's give a quick overview how Zuora works in regards to payment gateway integration and maybe we can spot what needs to be fix:
Payment Method creation - Zuora collects all the information needed + CVV and pass it over to payment gateway
If payment gateway says OK, Zuora creates Payment Method and if it error, no data will be created in Zuora.
During the authentication process (payment method creation), Zuora only submits the CVV value to payment gateway, we never store it as part of PCI compliance process and that is the only time Zuora have the CVV value.
When payment process kicks in Zuora will map the information we have in Payment Method and submit it to Payment Gateway. At this point Zuora will not submit CVV value because of the reason I explained on step 4.
If the payment returned error 'Invalid account number: 10535-This transaction cannot be processed. Please enter a valid credit card number and type.' and if payment gateway said its due to lack of CVV, that is expected behavior since Zuora never keep CVV value.
The solution I am suggesting is if you can sync up with PayPal and ask them to disable the CVV validation during payment processing. Again, this is only for Payment processing and their terminology might be Sale transaction. I believe the problem is PayPal requesting to include CVV on a payment process but Zuora is not submitting is since we do not store it from the first place. Therefore, remove CVV from the picture and the transaction should be process accordingly.
On the authorization process, if you submit CVV, Zuora submits it. If you do not supply CVV, then, CVV field that will be forwarded to Payment Gateway will be blank. Main idea, think of Zuora as a 'messenger'. Our main goal is to collect, submit the information needed by payment gateway and return the response we received from payment gateway.
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