Will that work particularly well since PayPal also adopted crypto? They have the money and resources to out-maneuver any weaker attempts at using crypto to displace them.
I assume that Lightning Network will devolve into federated payment infrastructure rather than something that is fully decentralized. It would be closer to email where providers share a protocol and interoperate by default with each other. In that sense, Paypal wouldn't compete vs crypto but with dozens of payment companies.
Yes because it's PayPal again in the middle with whatever fees they wish to apply. On crypto.
The difference between crypto and cash is that the bank can refuse a cash transaction, from either end, and through. With crypto the network accepts the transactions with no recourse to block it, reverse it, or impose their view on how money should circulate.