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You can cancel a payout item only if its status is UNCLAIMED. Use the PayPal business account dashboard or the Payouts API to cancel unclaimed payout items.
To implement payment cancellation functionality, use the following Dashboard or API tabs.
Unclaimed payouts expire in 30 days, and PayPal returns the money to your PayPal account.
PayPal cannot reverse payments that a payer sends to an incorrect email address or phone number. However, if the status of the payout item is UNCLAIMED, a payer can cancel the payout item and create a new payout with the correct recipient details.