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is your paypal verified?
is there money in the paypal or do you want to paypal to take money from your bank?
As for money, no. My transactions here are charged as credit instead of debit.
https://support.steampowered.com/kb_article.php?ref=8360-WEJC-2625#PayPal
but I got a recent mail from paypal saying they can take directly from my bank now.
but I think it is your problem.
here a bit from my paypal email
Ohh, I see. Well Steam in general is not processing my request entirely now, keeps saying "There seems to have been an error initializing or updating your transaction. Please wait a minute and try again or contact support for assistance." so I'll probably wait to see if I can try again. Thanks anyway though.