Source: this Storque article

After a short period of beta testing, all sellers now have the option to pay their Etsy bill with paypal. You can pay the full bill or make partial payments by filling in any amount, just as you did with credit card payments.

You will now see an option for PayPal under “Method of payment” when you go to Your Etsy > Your Etsy Bill > Make a payment.
When you select PayPal as your method of payment on this screen and click “Submit Payment,” you will be taken to PayPal. Log into PayPal to complete the payment. You will be directed back to Etsy upon completion of the transaction.

Paying your Etsy bill with PayPal is optional. You can still pay your Etsy bill via the credit card you have on file with Etsy. Regardless of whether you pay your Etsy bill with PayPal or credit card, Etsy sellers need to keep a valid credit card on file with Etsy because we require a valid credit card to become an Etsy seller at this time.

Etsy has also removed the one dollar minimum payment.

With this release we are also removing the minimum payment amount for seller fee payments, whether paid by credit card or PayPal. Previously, Etsy only accepted payments of $1 or more from sellers. This is no longer the case—Etsy sellers will be expected to pay their bills in full regardless of the amount. So, if you are billed $0.60, you can now pay $0.60, and you have the option to pay via PayPal

Please see the full Storque article for more information and for some Frequently asked questions and answers.

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