Reading this title is optional.
Re: existing payment terminals that make phone calls. Yes, indeed, such things exist. If you go to an outdoor event that's far enough outdoor, the merchant won't have access to much more than 2G GSM (not even GPRS or, worse, gprs), but the terminal will still make a phone call, presumably to the merchant's bank or other payment processor. (If the event is further out of doors, then the merchant falls back to a mechanical swipe-and-sign machine, 70s-style, complete with ugly carbon layers and the inability to sign with a fountain pen.)
Of course, that terminal calls a pre-set number configured into it by the bank, not one entered on the keypad, so the criticism of PayPal's proposal stands.
(FAIL icon partly for weak reporting, partly for the icon selection panel that looks like the icons are all disabled.)