The page layout at paypay.com is completely different than that of paypal.com, if a Paypal user went to paypay.com, they would know it was not Paypal.
I see your point for the domain being confusingly similar, because of Paypals name recognition and popularity, I think what troubles me the most is the typo issue, I think this is the biggest weakness of arguing the domain is confusingly similar by the mistyping of one letter.






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(and obviously, not mine).

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