I can't add a gift card as a payment method to my Apple ID

boosii wrote:

I purchased a PayPal gift card

A fixed value gift card is not a credit or debit card. You may be able to use it if you can also use PayPal as a general payment method where you live. Check this document about that: Payment methods that you can use with your Apple ID - Apple Support

You would then probably have to redeem it to your PayPal account and use it that way.

See -> Payment methods you can use with your Apple ID

Payment methods you can use with your Apple ID – Apple Support (UK)

fyi: Not all credit & debit cards seem to work with App Store / iTunes Store, try a different one, or preferably a credit card. If your card is not accepted as a paymenf method, you need to contact your bank.

You can use a Apple Gift Card or App Store & iTunes gift card for the App Store / iTunes Store.

Where to buy a physical Apple Gift Card or App Store & iTunes gift card:

Actually, you can buy an Apple gift card at an Apple Store or an Apple Authorized Reseller in your region.

If you have a valid payment method on file, instead of buying or order an App Store & iTunes gift card, you can Add money to your Apple Account balance anytime, no gift card needed, see -> Apple Gift Card - Apple (UK)

See also this Apple article:  If you can't redeem your Apple Gift Card or App Store & iTunes Gift Card

If you can't redeem your Apple Gift Card or App Store & iTunes Gift Card - Apple Support

Beware of -> About Gift Card Scams -> About Gift Card Scams - Official Apple Support 

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Read again -> Related Article: If your payment method is declined in the App Store or iTunes Store

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How to complete your purchase if a payment failed or was declined

1. On your iPhone or iPad, open the Settings app.
2. Tap your name.
3. Tap Payment & Shipping.
4. Add a different payment method and remove the old one. 
5. Try to complete your purchase.

If you still can't make a purchase

• You might have an unpaid order. Learn how to pay an unpaid order.
• Contact your financial institution. 
  • You might need to ask your financial institution to allow international purchases on your debit or credit card.
  • If you want to know why a debit card, credit card, or other payment method was declined, speak with your financial institution. Apple doesn't have information about why the payment method was declined.
• In some countries and regions, your payment method might be declined because of changes to local law. Learn about billing and purchases in Europe or what to do if your card is declined in India.
• Still need help? Contact Apple Support.

If you still need help, get more help and assistant from Apple directly, see Contact Apple for support and service -> Contact Apple for support and service – Apple Support (UK)