Your post is a bit hard to read with all the abbreviations and lack of details, but what is most likely to happen is that Discover will contact whomever charged your account. If they can prove it was a legit charge, it’ll stand. If they can’t, you’ll get the money back, and Discover will do a charge back against the merchant. Unless it was 10’s of thousands of dollars (or probably more), that’ll likely be the end of it.
If someone set up a Paypal account with your Discover number, it would be up to Paypal to investigate that. If that does turn out to be the case, you’ll probably want to get a new Discover number.
Do you have a paypal account? Have you ever responded to an email that said it was from paypal and asked you to provide some info?
Either way your cc company will investigate it. There’s nothing else you can do but dispute the charge.
I left a .1% possibility that I have another old PayPal account that I forgot about and it is just an innocent mistake of some kind that would show on that second account.
Closing the loop and providing some info in case it helps any one…
The charge was valid. Apparently PayPal provides credit card processing for some businesses.
My wife bought a gift for somebody and when it hit Discover it looked like a PayPal charge from the description even though it had nothing to do with my PayPal account and she doesn’t have an account. I didn’t even ask her about it because, again, it looked just like a PayPal charge.