It's just very nice layer of abstraction. I don't want every shop I buy from to know which Bank I use or my credit card number, because that's sensitive information.

Also when my credit card number changes because my bank randomly decides I'm at risk for fraud I have to login to every service and enter my new CC.

In 10 year of Paypal usage I have never once had an issue with my account being locked. Yes there are some cases here and there of people, but personally I didn't have that problem and I just it a lot also for Craigslist etc. Never an issue. I didn't even have to contact Paypal support once.

And since it's very popular in germany almost everyone online has to support it or they are losing business.