My son develops and maintains websites with e-commerce functionality. Not aware of any hosting sites which will handle e-commerce at no cost, though there certainly are some which will host simple sites for free or very little cost.
PayPal is simply a payment processor - there is much, much more to the e-commerce piece before you get to accepting payments. There are standardized packages available from companies such as Business Catalyst, now owned by Adobe, which can be highly customized to a particular companies products & services but they must either be purchased or subscribed to, more the latter these days I suspect.
