For anyone else experiencing this issue. The problem appeared to be the fact that I had two step authentication on my Paypal account. Once I removed that, connection was made. To be clear, this was using Paypal in bank feeds.
Hello there, nicola13.
We haven't received any reports regarding PayPal and QuickBooks Online with the exact error message. There's a possibility that the PayPal website is having a maintenance. I'd recommend reaching out to them to verify this matter.
Once they're done with the website maintenance, we can already refresh the connection on our end. We can do a few troubleshooting steps to get rid of the error. Cache helps your browser's background processes run smoothly. However, it can also cause issues when piled up. Here's how to get rid of any-cache related concerns:
If you're using Banking, we can manually refresh the connection between your PayPal and QuickBooks Online. You can use these links for reference:
From there, you should be able to continue categorising your transactions.
Feel free to get back to us if you need more help with this. Have a great day!