Same problem. Here is email I got from PayPal: Thank you for contacting PayPal Customer Support. My name is Chris and I am sorry we lost connection. The denied transactions on the Debit cards are part of a known issue our technicians are working on. The only solution currently is to have you add funds to the online balance and use the cards to access the funds from there until the technicians have corrected the error with the backup payment source. So, I added funds to my PayPal account. Guess what? My PayPal card STILL declined and there was ample money for the transaction. I have no idea what is going on, but I have DOZENS of bills set up on auto pay with this card. I am in a bad situation if they don't get this resolved soon!!!
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