Short answer: It can be done from the API version page on your dashboard.

API versions represent changes in our API that are not compatible with previous releases (aka 'breaking changes'). It could be, for example, the addition of a mandatory "Phone" field on Customers.

The typical API version cycle goes as follows:

1. You are using the latest version ('2014-07-27') of our API and enjoying our newest features in both Test and Live modes:
   
2. We release a new version ('2014-08-05') introducing a breaking change:
   
3. You update Test mode first:
   
4. You update your application in test mode, ensuring it is compatible with the latest version.
5. Once ready, you deploy your updated application and update Live mode as well: