If the merchant accepts Paypal, you should be OK.
I believe that the merchant will incur a 2.9% + 30 cent fee. The merchant probably pays this whether you use a CC or not.
Keep in mind though that the merchant may have chosen not to take credit cards because he doesn't want to aborb CC fees, and he may feel the same about Paypal. You might have to offer to gross up the payment amount to take Paypal.