Have you been able to verify your Paypal account?
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If you change your payment method to PayPal, you might be asked to verify your account. If you are, you'll receive a verification code either through a text message to the phone number on file with PayPal or instructions to get the code through a code generator. If you can’t access this verification code, you might need to sign in to PayPal to update your phone number or contact PayPal for more help.
PayPal is only available in Australia, Austria, Belgium, Canada, Finland, France, Germany, Greece, Ireland, Israel, Italy, Luxembourg, Mexico, Netherlands, Portugal, Spain, the United Kingdom, and the United States.
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copied from: Payment methods that you can use with your Apple ID - Apple Support