How does Membership plugin know that a paypal payment went through?

I would like to install the Membership plugin - but the newest version 3.0RC2 apparently needs Wordpress 3.3.2 - and I am not sure I want to spent time and effort for this upgrade on a couple of sites running with the same 3.2.1 install.

So here my question:

How does the Membership plugin "know" when Paypal payments are actually successful? We have Single Payments as well as Recurring Payments (monthly).
In other software handling Paypal payments I usually have to adjust an IPN (Instant Payment Notification) URL which paypal will call when a payment is successful (or fails or ...). Then the program at the IPN URL will adjust the database used for storing the sucess (or failure) of payments.

In the (very extensive made) handbook for the Membership Plugin I cannot find that I can provide such an IPN URL.

Did I not find it? Or does the plugin use another method (which I may not know yet)?

Thanks for any hints on this topic ...

Emanáku.