There is no payment option for cash on pickup - there is only a payment option for pay on pickup.

If you select pay on pick up, then your delivery options should be congruent with your payment options and offer that local pick up is available. 

If the buyer sends someone else to collect on their behalf and has not advised you of this, then you are within your rights to refuse to handover the goods.   A phone call to buyer using ebay contact information can usually sort this out on the spot - and a seller is within their rights to request that confirmation is sent via ebay messages to confirm the pick up arrangement proposed by buyer. 

There is no paypal buyer or seller protection on pick up items no matter what method is chosen for payment,