No, not the best option to use paper for just the chips as I mentioned in article you have other two options react-native-chip react-native-chip-view but thing is if you have additional requirements like add icon, cross option and so on... paper is good option.

p.s. chips aren't that hard to customize w/o a library either you can take your data and map it to a view with borderRadius and voila homemade chips. :D