That's a funny one since, as far as I know there is no option in our PayPal plugin to choose to receive credit cards or not via PayPal (and I don't know of any parameter of their API to send that choice to PayPal, but if they know one, we'll be happy to add an option for it) and we actually use the plugin on our own website (with basically the default settings) and it's working fine...
I would recommend to insist on their end to know what they mean by "the shopping cart on the website isn't set up to receive the credit cards with out having to open a Pay pal account" since I don't know of such setting.