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Well, I have an amount in my steam wallet, and an amount in my paypal balance, I was trying to buy some dlcs and it always appears this error, the same error appears when I try to add funds to the steam my paypal does not have any linked cards, I try to make the purchase with the balance and the wallet of steam but always the same problem continues I have been suffering from the problem since the beginning of 2018
Your purchase has not been completed.
The payment processor has reported an authorization failure. Please select a different payment method
Can't see your screenshot as it has to be approved by the moderators before we can see it.
You can use funds in your paypal balance 'as long as' they are in the correct currency and not pending.
BUT for some transactions ie digital / virtual or higher risk AND at 'some point' anyway Paypal will ask you to add a card to act as a back up funding source and to verify your Paypal account.