Automated Negative Testing

I want to set up automated tests in my application which perform actions like this:

• User signs up in my application, redirects to PayPal, signs a billing agreement successfully, redirects back to my application
• Create a reference transaction via the classic API successfully
• Create a second reference transaction via the classic API - FAILS

The test would then ensure the application behaves properly after the failed transaction.

I have read about negative testing which makes transactions fail for the entire merchant account, but is it possible to make individual transactions fail for a buyer? For example, is it possible to add a failing test credit card to the buyer, or enable a negative testing switch for the buyer?