Paypal is definitely the most used on-line payment processor currently available, even when taking into account the scale of sizable percentage of online gambling sites that do not allow funding with PayPal accounts. There is fantastic news and not so fantastic news if you are using it. The bad news is that there aren't great deal of online poker websites that take Paypal payment. On the other hand, there are several great sites that do accept it.
The reason for it not being accepted by many sites is due to strict regulations imposed by countries trying to combat illegal operations. To face the problem, what they did is to only allow and accept players from countries where online gambling is legal and regulated. There are currently 10 countries that allows online poker paypal. According to Poker Genius Media - These countries include Austria, Denmark, Finland, Germany, Ireland, Italy, Portugal, Spain, Sweden, and last but not least, the United Kingdom. As you can see, most of these countries are within the E.U. jurisdiction where the industry is legalized and there are laws in place governing the industry's practices.
In the United States however, only two states have leniency towards the matter. These states are Nevada and New Jersey. Back in the early 2000's, things were different. Back then it was possible to fund your account using PayPal but things changed once E-Bay bought the company. They did this to make sure that their circle of merchants are only involved with family friendly type of businesses. There are signs and indications that things might loosen up in the future now that it's being run independently from E-Bay.
However, if you're from the United States, there are many different methods to fund your account such as with credit or debit cards, wire transfer, Skrill, Money Booker, Payoneer, Bitcoin, etc. Bitcoin has seen a rise in acceptance within the online poker community. This is largely due to the fact that it's not traceable - thus keeping the players' identities a secret. Whether that's a good or bad thing, we're not sure. The safest method would probably be to use your credit or debit card since if there's any fraudulent activities, you can always inform your bank about it and they can rectify the problem by either issuing a charge back or escalating the problem further if necessary.
Online poker is now a billion dollar industry so we doubt that PayPal would want to miss out on their slice of the pie. In the US, a quarter of each dollar spent in gambling are spent online. With the current trend, we predict that the amount will rise and double, from a quarter of each dollar to 50 percent of each dollar. It's a fast growing sector, in 2001 the revenues generated online was only $87 million USD. Reports state that revenues in 2004 reached a whopping $2.4 BILLION USD. Yes, you read that correctly, $2.4 BILLION USD - that's a 30X increase in a time span of only 3 years.
It will be interesting to see how online poker rooms will perform within the next couple of years and if PayPal will start loosening up their stance on it. With more and more countries legalizing and/or regulating it, there's definitely a lot of money to be made, as well as a lot of profit to be gained and most importantly a rise in millionaire players.