Not, no biggie, we’ve got an interesting in theory, largely impractical in practice alternative, crypto!
What PayPal is doing is entirely consistent with that. In a free society, suppliers are free to decide whether they want to do business with you, and under what conditions. And you are free to make the same choice.
(Of course, we'd hope that in a free society competition would take care of providing suppliers that offer conditions that customers can agree with. But there's no guarantee of that.)
Institutions need to protect the freedom of their users. You're talking about a completely different kind of freedom.
Competition is one solution to the problem, by avoiding incumbent institutions, but it often fails and it's not the only solution.
For example, (many) Germans expect to be free to drink alcohol in public or eat Kinder Surprise. (Many) Americans expect to be free to shoot guns, but can live with bans on public drinking.