The alternative would be credit card and bank payment processing through a gateway such as Braintree, Dwolla, or Stripe.
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2CO is a great option, but I'd prefer rolling payout.Well, cut out PayPal, use 2checkout since they accept PayPal for you.
So then you can still accept PayPal.
^^ This.I don't think the payment options are as important as the quality of service
The customer has virtually no protection if something goes wrong when they pay for hosting services with PayPal because hosting services are virtual goods. If a customer wants protection they should use a credit card.Every hosting company should have paypal as a payment option, no doubt about it.
It also makes it more easy and safe for the customer.