(I think that field is related to credit card processing, but I'm not sure on that).
Why not just create a UDF?

Other is a payment method that can be used when setting up payment types. Go to Accounts Receivable, Setup, Payment Type Maintenance. I do not see why you could not set up a payment type for PayPal and use the reference no field in Sales order to manually track the transaction id. Using the UDF to track might make it easier for you to see the historical reference number where you need it.

Thanks Linda!