When you use your bank account to pay, an 'Instant Bank Transfer' becomes your funding source. Despite this name, the money actually takes 5-7 working days to clear from your bank. The reason the payment to your seller completes instantly is because PayPal fund this on your behalf and wait for your bank transaction to clear. If you're refunded before the transfer completes, the refund is placed on hold to make sure the original transfer clears from your bank.
Your refund will complete within 5-7 working days from the date of your original payment. Once the money has cleared from your bank it will be added to your PayPal balance.
