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As far as I know, you can NOT embed the custom embed code of paypal button into JotForm form. The script codes that are on the paypal button code will only be erased by the form when save in the form builder.
However, we highly recommend that you just use the form Paypal integration instead, which have the same purpose.
Review this guide http://www.jotform.com/help/50-PayPal-Forms
This way, each user will be redirected to the PayPal payment page upon submitting the form, and each successful payment will be moved into form Submissions.
Please feel free to contact us if you need any further assistance.