Chained payment - Live API error code: 550001

Hello,
i am stuck with the live api for chained payment and would need some help to get it to work.

After submitting the api request to x.com, and filling all info as required in marketpress doc, the application for chained payment was immediately "conditionally approved".
i removed all sandbox info and placed the live api credentials in marketpress network settings.

Now, when i am trying to buy a product from one of the sellers in the marketplace, i get this message: "There was a problem connecting to PayPal to setup your purchase.Please try again. 550001 - User is not allowed to perform this action".

I have a few questions:
1/ Since Paypal seems to approve "conditionally" chained payments immediately, is there any other steps to take?
2/ does the sellers (primary receivers ) need to grant authorization to the marketplace api in their paypal account for it to work (Manage Third Party Access) ?

Paypal for marketplace admin: Account Type: Business , Status: Verified
paypal for seller: verified
I am running marketpress 2.5.6 with paypal chained payment gateway enabled only.
global cart off
wordpress mu 3.3.1

Thanks for the help.