Hi Paul! Lucky for us, your next step is written in the error message: “Please contact PayPal Customer Service”. 🙂
Most likely they have configured your Adaptive Payments account wrong, OR you have a typo in your API Keys and such on the paypalap gateway configuration screen in WooCommerce. Triple check your settings, and if no good results come from that, shoot PayPal a email or a phone call.
So, when it is working, what happens to the vendors commissions? Depends! wp-admin > WooCommerce > WC Vendors > Payments — Whatever you configure there is when the vendors will get their cash. 🙂