During checkout, why is the customer skipping the payment step?
With Commerce Paypal, I ran into the same issue.
I believe the fix for me was to the move the Payment Information (currently disabled) into the Order Information section. Might also work if you move into Review or Payment section, not sure.
Also, since you're using Paypal, I think you need to disable payment process.
Here is my working setup. Note: I didn't want users to login nor register.