Fees are a good point. PayPal's fixed fee (0,35€ per transaction on top of the percentage) is actually kinda painful, since we have relatively low average order value.
Do you have an exclusivity clause ?
It might be costly but I don’t understand scary.
What I would find scary is the risk that they ban you if you have only one payment processor.
We offer both credit card and direct debit payment outside of PayPal (through Mollie.com), but people just prefer PayPal for the convenience and added buyer protection.
Since 2021, normal credit card payments in the EU also require 3DSecure verification, which causes many people to abort the payment for whatever reason (maybe they don't know how it works / don't have it set up correctly).
Having multiple payment processors is extremely important and I'm actively working on that. For example having multiple credit card processors and integrations ready to go. If you are paying with your credit card without using PayPal, you don't tend to care which processor the merchant uses. PayPal is just a special case because its so popular.
As a developer, PayPal is the worst, so many horror stories of money frozen.
Every time I see PayPal, I hit the 'nah, just let me fill in my card details'. I think you're overestimating their worth, and underestimating both your customers and the competition. As someone already pointed out: "Stripe/Google Pay/Amazon Pay" are available, to name just the most recognisable ones. There are others with better fees!