Q: STORAGE UPGRADE PROBLEM

I'm not certain that PayPal can be used to pay for iCloud storage although this page does say so, and that it varies by country -- Payment methods you can use in the iTunes Store, App Store, and iBooks Store - Apple Support.

I'd say give it a try, and if it doesn't work, scroll to the bottom of the page (link above) and reach out to Apple Support for further assistance.

Good luck.

If you have access to iTunes gift cards, buy a bunch of them, and add them to your iTunes account. The storage fee will be deducted from there.