The issue here is due to iPayment running in Demo Mode.
When iPayment is running it Demo Mode, it automatically uses the credentials for the Boyum Sandbox environment, to make it easier for customers to test the product.
If you would like to use your own sandbox environment for testing, you will need to provide the correct credentials for your own sandbox environment, and NOT have iPayment running in Demo Mode.
To clarify - the Demo Mode in iPayment indicates whether iPayment itself is running in Demo Mode, and has no influence on whether or not you're using the Payment Providers live environment.
The Payment Provider environment you're using depends entirely on the credentials used when configuring iPayment.
Note: When switching to Demo Mode, any previously configured credentials will not be used (the fields will be grayed out).