Ask the merchant to double check the email address he has on his Paypal account.
And you should check to see that it matches the one you used.
Usually the problem is that the seller made a typo.
Another possible problem is that you are backing your PP account with your bank account. In effect, you wrote an 'e-cheque' which, like a paper cheque has to clear the banking system before the it is released to the seller.
This usually takes less than a week, Canada to USA. Ask him to be patient.
But if the seller, like you, is new to eBay, he may not actually have your payment yet.
Even if your PP payment, backed by a cash balance or a credit card, has been sent, new sellers do not get the payment immediately.
Instead PP HOLDS your payment against his good service.
This Hold can last up to 21 days, but he can print a Paypal shipping label from the Held balance, so he can ship immediately.
The Hold ends when the purchase shows Delivered.
With any of these situations, sellers sometimes panic and cancel a perfectly valid transaction.
So keep it polite and friendly.
It's like soothing a horse sometimes.
