So from what I can gather, niteo is a SAAS. For Paypal to ban them in what is a pretty non controversial business, they must have commited one of the following offenses:

1)Breach this user agreement, the PayPal Acceptable Use Policy, the Commercial Entity Agreements (if they apply to you), the PayPal Cash and PayPal Cash Plus Account Terms and Conditions (if it applies to you), or any other agreement between you and PayPal;

2)Violate any law, statute, ordinance, or regulation (for example, those governing financial services, consumer protections, unfair competition, anti-discrimination or false advertising);

3)Infringe PayPal's or any third party's copyright, patent, trademark, trade secret or other intellectual property rights, or rights of publicity or privacy;

4)Sell counterfeit goods;

5)Act in a manner that is defamatory, trade libelous, threatening or harassing;

6)Provide false, inaccurate or misleading information;

7)Send or receive what we reasonably believe to be potentially fraudulent funds;

8)Refuse to cooperate in an investigation or provide confirmation of your identity or any information you provide to us;

9)Attempt to double dip during the course of a dispute by receiving or attempting to receive funds from both PayPal and the seller, bank or card issuer for the same transaction;

10)Control an account that is linked to another account that has engaged in any of these restricted activities;

11)Conduct your business or use the PayPal services in a manner that results in or may result in;
-complaints;
-requests by buyers (either filed with us or card issuers) to invalidate payments made to you;
-fees, fines, penalties or other liability or losses to PayPal, other PayPal customers, third parties or you;

12)Use your PayPal account or the PayPal services in a manner that PayPal, Visa, MasterCard, American Express, Discover or any other electronic funds transfer network reasonably believes to be an abuse of the card system or a violation of card association or network rules;

13)Allow your PayPal account to have a negative balance;

14) Provide yourself a cash advance from your credit card (or help others to do so);

15)Access the PayPal services from a country that is not included on PayPal's permitted countries list;

16)Take any action that imposes an unreasonable or disproportionately large load on our websites, software, systems (including any networks and servers used to provide any of the PayPal services) operated by us or on our behalf or the PayPal services;

17)Facilitate any viruses, trojan horses, malware, worms or other computer programming routines that attempts to or may damage, disrupt, corrupt, misuse, detrimentally interfere with, surreptitiously intercept or expropriate, or gain unauthorized access to any system, data, information or PayPal services;
Use an anonymizing proxy; use any robot, spider, other automatic device, or manual process to monitor or copy our websites without our prior written permission; or use any device, software or routine to bypass our robot exclusion headers;

18)Interfere or disrupt or attempt to interfere with or disrupt our websites, software, systems (including any networks and servers used to provide any of the PayPal services) operated by us or on our behalf, any of the PayPal services or other users’ use of any of the PayPal services;

19)Take any action that may cause us to lose any of the services from our Internet service providers, payment processors, or other suppliers or service providers;

20)Use the PayPal services to test credit card behaviors;

21)Circumvent any PayPal policy or determinations about your PayPal account such as temporary or indefinite suspensions or other account holds, limitations or restrictions, including, but not limited to, engaging in the following actions: attempting to open new or additional PayPal account(s) when an account has a negative balance or has been restricted, suspended or otherwise limited; opening new or additional PayPal accounts using information that is not your own (e.g. name, address, email address, etc.); or using someone else’s PayPal account; or
Harass and/or threaten our employees, agents, or other users.

These terms run the gamut from being bad with money (negative balance) to criminal. That is a wide swath of terms to action against you or your business, and leave plenty of room for arbitrary ban hammers to be wielded. I can agree that there are way better and safer ways to accept payments these days, and it seems PayPal hangs on with name recognition, and not by merit of it being the best choice.