You might have heard about PayPal being unavailable on Steam for certain currencies. The issue is that the aquiring bank for PayPal are blocking payments in specific currencies, and it seems it's the same case on itch.io.
Login to Paypal and go into your Wallet. Click on your card and change the currency to one of: EUR, CAD, GBP, JPY, AUD, USD (these are the currencies confirmed to work for Steam)
It should then work after you've changed it. After I changed this, my payment was able to go through.