Cannot test in-app purchases with dummy account

[lostInTransit]

Hi

I have created a test account for sandbox testing of in-app purchases. I am following these steps to test

1. Logged out of any existing accounts
2. Open app and start getting list of products available
3. Start process to download a product

SKPayment *payment = [SKPayment paymentWithProductIdentifier:productId];

[[SKPaymentQueue defaultQueue] addPayment: payment];

Now ideally I should be asked for the user name/pwd at this point. But I am not prompted for anything and the transaction fails (obviously because I am not logged in)

If I try to login from Settings->Store, it asks for my credit info which I'm sure is not necessary.

Can someone please help me with this issue.

Thanks...