We at mobikwik.com had briefly stopped the usage of paypal as a payment option on mobikwik.com for online recharge of Indian mobile operators. This was done to beef up some of the changes that happened as a result of paypal changing its policies in India. Also, paypal does not treat Indian merchants too kindly in terms of digital goods, so we had to reinforce in terms of security measures.
The exchange rate and paypal fees remain the same, so no change there. A Rs 100 recharge will cost 3.20 USD and so on.
Please do send any questions you have in the comments here.