Last night I sent payment to someone via PayPal. 2 hours later he told me he hasn't received the payment and the PayPal address he gave me is wrong, there is no PayPal account associated to it. So I cancelled the payment and now the transaction details show it is on temporary hold but under the status is a message which says The payment was cancelled and the money is in your PayPal balance.
However there is nothing on my PayPal balance. I didn't have money in PayPal in the first place. Every time I pay someone, it takes money from my bank account. Would it have gone back to my bank account or is it supposed to be on my PayPal balance.