Resolution:
1. Create your selling test account using the Preconfigured option.
2. Under Account Type, select Website Payments Pro.
3. My Account --> Profile --> API access to get API username, API Password and Signature
Remember the API credentials are different from the test login account. You have to save the login password to the Sandbox account in Step 1 above. There is no way to go back and view the login password to the Sandbox account.
