One of the big problems with using PayPal, from my non-BYOND development experience, is that it's easy to get scammed out of your cash. One of the games I've been running for just under a year and a half has had a pay-for-perks business model where players pay for a game currency and can then spend that in a special shop in game for the perks. The game has a lot of players from outside of the USA, a lot of which come from middle and south America (Puerto Rico, Brazil, Mexico, etc.) Without blanket sweeping any demographic, I'll say this: it's easier for an out-of-USA player to claim fraudulant charges on their credit card and get away with it, even when you can provide solid, documented evidence that the claimant willingly paid for the product. Then PayPal charges you $15 AND takes the money back from you - it's apparently your fault that you took a fraudulant credit card, so you're charged. This chargeback fee is actually coming from the credit card company itself, and heaven forbid they take responsibility for their own clients. So far I've lost around $635~ to this kind of fraud so far in that year and a half.

Game companies have wised up to this, however, and they've devised a new solution: offload the risk to another merchant. If YOU process the credit card transactions (or use PayPal) that puts YOU at risk for the chargeback. However if you can offload that risk to a brick-and-mortar merchant such as Best Buy, Blockbuster, or even 7-11, then you stay invulnerable to any chargebacks.

...provides one such service. You purchase the Zeevex cards from a local retailer and redeem them for points on your account. You then spend these points in a number of different online games for whatever perks/subscriptions you need. The risk is held by the original vendor (Blockbuster/etc.) while Zeevex and the game developer remain free of repurcussions.

Is this fair? Well, is it fair for credit card companies not to take responsibility for THEIR customer's actions? Why should businesses be burdened with charges stemming from their client's misbehavior and irresponsibility?

The virtual economics market is an interesting one, and I hope to see BYOND return to an automated subscription and payment model at some point in the future. I just hope they can find a solution that mitigates their risk as well.
PayPal doesn't suck, you just need to know how you are going about using it. Providing a virtual service to another user is pretty hard to prove without solid evidence, making sure to have a actual contractual agreement setup for any charges could help a lot, keeping logs of the game, player log-ins and IP addresses could also help. Like I said, you just need to know the law, how PayPal works and how to actually use their system. PayPal has a system in place designed to try and protect the consumers and I for one have no qualms about it.
PayPal sucks. They do NOT provide support for virtual transactions - this was evidenced when I included complete system logs detailing login/logout (a small subset of the logs, which detail everything) patterns for the scammers in question for 2 months prior to their first transaction, on through their entire stay on the game.

In addition I provided email transcripts with the full MIME headers of communications with the parties in question.

In the end I lost the money and paid the fees. Obviously the players were outright deleted and permanently banned after the fraud, but I still had to pay $15 for every transaction they made - whether it was $5 or $30. Ten $5 charges shouldn't charge me $150 in fees when it gets reversed.

It's not PayPal's FAULT, but they DO NOT provide a solid method of handling virtual transactions.

Therefore my intents and purposes: they suck.
well when paypal sucks.... well never really failed on me
You should have investigated it before you started taking money. A quick look through their site, or even "Googleing" it would have revealed results. In the end, you should have made it a donation factor deal. Not their fault you don't know what's going on.
What I do is only deal with users that have a verified paypal address. When I'm scammed, I fly to their address and beat the living crap out of them.

Er, allegedly.
This is why I don't worry about the percentage BYOND takes from game sales anymore. BYOND takes the hit (and has taken many) during the waiting period before payments can be cashed out.
I've seen a disturbing amount of BYONDers use fraudulent credit cards to pay for subscriptions over paypal over the years.

So I am in agreement with ACWraith. It's definitely worth it to use BYOND's system.