Note: if you're using Paste 3 and later, you don't need to install Paste Helper. Learn more in Paste directly to other applications.
Paste helper is a tiny app that enables Direct Paste and Paste Stack features and allows Paste to paste directly to other apps. You only need it if you downloaded Paste from the Mac App Store prior to version 3.
After downloading, locate Paste Helper.zip in your Downloads folder.
Unzip the archive and launch Paste Helper by double-clicking it.
Paste Helper will automatically switch you back to Paste and Direct Paste will be enabled.
Why is this necessary?
The apps on the Mac App Store are sandboxed, which means that they can't communicate with other apps. That's why we introduced an optional helper application that makes Direct Paste work and enables pasting data to other apps directly.
Paste Helper installs itself to
~/Library/Application Support/Paste Helper directory and runs in the background.
You can always disable Direct Paste in Preferences and remove Paste Helper.