I believe he means that the (Australian) customers love PayPal, not the merchants. It might be a disadvantage for the merchant to use PayPal but the customers

I believe he means that the (Australian) customers love PayPal, not the merchants. It might be a disadvantage for the merchant to use PayPal but the customers in Australia on a whole may prefer PayPal to other payment solutions online. The perception that it is safe or what not. If the customers don't perceive your service as a safe option they probably will not buy your product.