You can now pay with PayPal on the App Store, iTunes and Apple Music
So, how exactly does this work? First off, you must have a PayPal account, but if you don't, you can create one for free. Assuming you already have an Apple ID, you will then be able to select “PayPal” as your payment method.
Once PayPal is selected, it will become the default payment method for all purchases you make using your Apple ID. Using the new option, you'll be able to pay for apps, music, movies, TV shows, books, as well as subscriptions (Apple Music) and even iCloud storage.
The new payment option introduced today will also bring PayPal's One Touch to all Apple ID accounts, so you'll be able to smoothly purchase anything from all Apple devices, including Apple TV and Apple Watch.
source: PayPal
Things that are NOT allowed: