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We are not able to process your payment using your PayPal account at this time. Please return to the merchant's website and try using a different payment method (if available).
this is what paypal said TwT
Does it have a verified bank account? You need to connect your bank account to your paypal or atleast just have money on your paypal itself.
The problem seems to be at Paypal and not Steam.
EDIT:
The problem can be anyting else. If this doesn't work I'l give you a few more solutions. If that doesn't help then you will have to contact Paypal yourself.