I'm getting the same issue! I thought maybe it was eBay but I contacted eBay and no issues there. I contacted PayPal yesterday and the agent was as helpful as a no armed arm wrestler! I logged off and logged back in, changed my payment info, changed preferred payment (even though my PayPal has a balance) and also tried different browsers and other computers, nope same issue. Sorry, this payment option isn't available. Here are your options: Select a different payment option. Contact PayPal customer service to resolve this issue.
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