Transaction Status Pending for too long and Payout denied eventually in Sandbox

[aish694]

I am having trouble creating payout requests in Sandbox environment. I have tried this with business accounts associated with two different developer accounts and the issue seems to persist regardless. Following are the issues:

1. Created a payout batch with a couple of items as a cURL request to the Payouts API, but the transaction status is pending state for way too long. 
2. When the transaction finally gets processed, it always moves to DENIED instead of Successful despite having sufficient funds in my corresponding sandbox account(s). This transition from PENDING to DENIED state happens only after about 7-8 hours.

What I have tried so far:

1. I have tested this as a cURL request and via my application where I have integrated the PayPal Payouts SDK. The persists regardless of how I test the payments. 
2. I have tried several recipient accounts to yield a successful transaction like a valid personal PayPal ID, ID associated with a different business account, ID associated with the same business account as the sender. In neither of the cases was the transaction successful but always DENIED. 

On a sidenote:

1. I have been using the SDK for quite a while now and tested payments previously in Sandbox where this issue never persisted. 
2. This doesn't seem to be an issue in production though. All payments get processed instantly and are completed as well.

Few other doubts:

1. I am currently using IPN to receive payment notification updates. Using IPN hasn't been an issue so far and I assume the transaction_status as PENDING has got nothing to do with how I wish to receive payment notifications either via IPN or webhooks. Or does this have an impact as well?
2. Since I am using an SDK which has been deprecated for a while, would there be issues in future while processing payments by relying on the SDK although there are none of the sort right now in production?
3. I am currently only handling Payouts in my application. Would migrating from IPN to webhooks have a considerable impact in receiving payment updates? When should I consider migrating? I receive payment updates in production in about 10 seconds (worst case).

Kindly provide assistance for the same.