Refundsweepers, a refunding site, has a post that has several members reporting that MyPoints now has listed PayPal as a rewards option. However, not everyone is seeing this reward option (myself included!) According to the original poster there, the PayPal reward is structured as follows:
4,400 points for $25 PayPal; and
8,800 points for $50 PayPal.
If you don't see it listed, perhaps it will show up at a later time. I was glad to see that they finally got some Amazon.com gift certificates back in stock after being gone for a few months.