English is not my first language, does this mean that by calling PayPal a "payment method" i mischaracterize it? (is it a .. payment service .. whatever?) Or does it mean that I agree not to "mischaracterize" PayPal in general because I don't like it? (then why would I offer it)
It's probably incompetence though since this can work both ways. If PayPal tried to bring legal action with this clause, the first defense one would look at is to simply respond, "Where did I say it was a payment method? The clause says I can't mischaracterize it as a payment method, and I didn't."
In any case as it reads most simply it says you can't call PayPal a payment method. I doubt that's what they really meant to say.
If it actually is a payment method (as their lawyers undoubtedly take as a given), then it limits mischaracterization to aspects of PayPal that do not involve its character as a payment method.
Only if you already believe it is somehow "not a payment method" does the other reading make any sense.
Having said that, a quick skim suggests the term is used inconsistently. Sometimes it refers to PayPal as a payment method, other times it refers to the information you enter into PayPal (ie credit card, bank account, etc) as payment methods. This is because PayPal is both a payment method itself and a wrapper service for many payment methods. For example:
Your PayPal balance, if you used your PayPal balance as the payment method or a bank account as the payment method, once the money clears the bank.
1: https://www.paypalobjects.com/webstatic/ua/pdf/US/en_US/ua.p...
e.g. The party receiving payment ("seller") shall...
This one didn't.