Your seller sounds as if they might be confused about how to conclude a Cash on Pickup transaction.
After a buyer pays cash and picks up at the door, the seller has to manually mark the item Paid and Shipped in his/her Sales Manager or Sales Record. (There is no Paid and Picked Up option, per se.) Send the seller a message and ask him to do so, assuming you haven't been sent to Unpaid Case. If that is what has happened, you'll have to call ebay about it or you could end up with a permanent mark on your record that is not your fault, given you paid of the items fair and square.
Sometimes on a mobile device it will continue to tell you to pay for the item even if it has been marked Paid. You'll just have to learn to ignore it until it expires on its own after 60 days or however long it takes. It's an app glitch.