When I signed up for Paypal, I had to give my name, address etc. Paypal informed me that they would debit my credit card for 1.95$ as a way of checking the validity of my card or so...
When I received my statement (MasterCard), this 1.95$ showed up with as a Paypal payment with a 4-digit number next to it. This was the number I next used in my Paypal account, and the 1.95 was subsequently put back on my 'credit' with Paypal.
Meanwhile I could already pay via Paypal, so I don't know why this doesn't work for you. But, unlike direct payments by CC, you must provide more personal data when using Paypal.

The good thing about Paypal (at least, good for the suppliers like, in this case, Captain Sim) is that they don't have to create their own (expensive) secure website. All the overhead regarding payments is taken care of via Paypal.