Apple and PayPal were reportedly in talks however it is believed that they went south. Now why did that happen? According to one report Apple pulled back when PayPal signed up a deal with Samsung earlier this year that opened up the Galaxy S5's fingerprint sensor to authenticate PayPal payments. It is now believed to be the reason why Apple Pay doesn't have support for PayPal and why it is not even listed as an acceptable payment platform in the developer manual.
The same report also claims that then PayPal President David Marcus was opposed to the company signing a deal with Samsung because he believed it would put the company's relationship with Apple on the backburner but apparently parent company eBay's CEO John Donahoe went ahead with it anyway. Marcus has since moved on to Facebook and eBay has decided to spin off PayPal as a separate company by mid-2015.
Nevertheless the damage has been done, Apple has given the cold shoulder to PayPal as far as its payments service is concerned, whether or not it'll soften up in the future remains to be seen.
