Clicking the Buy button is not 100% proxy for purchasing intent, particularly if you have not disclosed e.g. the price prior to clicking it, in which case the main user intent is "discover the price." Even if you have, it is a regrettable fact of life that many users abandon that transaction at the last moment. (This is why we optimize the heck out of those last moments.)
As to whether having Paypal as the only option costs you some transactions on the margin: test it. I have, extensively, for one of my products. It's a long story, but having a fairly well-optimized onsite purchasing flow was worth about a 60% lift to purchases. (I had done many tests prior to that where not-so-optimized onsite purchasing made no difference in conjunction with or tested against Paypal.)
I definitely feel as if they discourage the use of their API through poor documentation and a test/sandbox site that will randomly drop you back into production without notice