I recently wanted to buy a product from a manufacturer and luckily they offered PayPal as a payment method. However, after I signed into my PayPal account, it wouldn’t show my bank account as a payment option and instead prompted me to add a card or bank account, despite my account being fully confirmed and direct debit activated. PayPal customer service reps told me that maybe the retailer blocked direct debit through PayPal and I should try adding a credit card, however, why would they do that if they offer non-PayPal direct debit anyway? The customer service reps further told me that my account was in good standing, so there shouldn’t be any problems with trust etc. Have you ever encountered an online shop that refused direct debit when handled by PayPal?
I’m not sure if this helps, but my PayPal account has two sources configured. One is direct withdrawal from my checking account. The other is a debit card tied to my checking account. I have never had a merchant refuse it.