Only text type columns will have a collation. It's possible the broken data already being stored is a problem. Empty the `raw_data` column for every row in the table using an update query. This will remove the logged raw data without removing the notification. Once done retry a test payment.

Please PM backend super user login credentials and will take a look at your site. The notifications table appears to be completely empty.

This seams like an encoding issue on PayPal's end. I've no idea what encoding they're sending data in, but doesn't seam to be UTF-8. Navigate to the below URL after logging into PayPal.

www.paypal.com/cgi-bin/customerprofileweb?cmd=_profile-language-encoding

Next click More Options then change "Encoding" to UTF-8. I don't know why they hide this like crazy, but that sometimes can be the cause as Joomla, CB, and CBSubs all exclusively use UTF-8. Once done retry a test payment and see if that works. If using a sandbox account you'll need to change the domain in the link above to their sandbox domain to reach that page for a sandbox account.