Below is a screenshot of the notice from SIE: The decision will affect both purchases on PlayStation Store Malaysia as well as PlayStation Plus subscriptions. With the removal of PayPal as one of the payment methods for PSN in Malaysia, this means local PSN users might want to provide their credit card details on their account for payment purposes. Alternatively, they can also purchase the physical PSN reload cards (shown below) that are readily available at 7-Eleven outlets throughout the country. These cards are also available through selected game stores and digital currency stores as stated in this list.
Meanwhile, SIE didn’t provide any reason why the company decided to end the support for PayPal in Malaysia. We have reached out to SIE in order to obtain further clarifications regarding the decision as well as to find out whether it involved only Malaysia or other countries as well. (Source: PlayStation Asia. Thanks Memphiz Zx for the email screenshot!)