Back to the problem at hand: Paypal has an extensive PHP API available, poking around their website will help you out.
PHP is just a server-site programming-language. The code is generated once and when the output is sent it cannot be modified by the client anymore.
JAVA can do both if the server also runs a JAVA-Server.
So PHP for me isn't the ultimate high-end programming language. It is just perfectly for organizing files on the server and creating dynamical websites. One very import advantage: PHP is very secure when you don't mess around too much.
IF i concern more, paypal was and must be developed in PHP,....and considering the upgrading issues , The things get more complicated, J2EE gives more sophisticated idea regarding MVC like these type of website could be handle easily, but most probably, Data inconsistence and consistency issue, PHP is a good way to handle it too..... so
may they are still using PHP or might be they converted themselves to JAVA WEB(Spring framework Adopted)
Depend on their Business Need....