The truth of the matter has little to do with bad sellers, buyers or of people at all. PayPal's original business model was to profit from the interest earned from funds deposited into their accounts and held for a (formerly) short period of time. Initially the 'holding period' was pretty short two to three days. Electronic transactions were/are quicker within the structured Paypal "shell'. Many people, myself included bought, sold and kept a balance in the system. It was convienent and seemed to work smoothly as long as you didn't mind surrenderring the earning potential of your capital to pay for these e-services that banks had yet to fully embrace. (an interesting excercise is to calculate the millions of dollars of real income gained by PayPal and the potential income lost by countless PayPal users leaving small, and large sums of money in an essentially 0 interest account for years.) However it doesn't take an investment banker to realize the nearly exponential increase in revenue when plotted against greater holding time. The company has grown into a behemoth, quite impressive given it's humble beginnings. They are adept at creating 'real' money from virtual sources as all banking services are. I personally dont' like to use the service, but find it inconvienent not to at times. There was a movement ( and government investigation) in Paypals initial year of operation to charge them for the use of money that doesn't actually belong to them and is being (willfully) held several times longer than should be to cover handling and convienence fees. If enough customers would have insisted on this in the beginning, Paypal would likely be one of thousands of small transaction processors eager to transfer funds through their network in hours instead of what, about a month now? If there were enough outcry and protests, these questionable (though totally legal, we all clicked on the "agree" button) tactics might change. But preditory financial practices are the norm these days (referring to payday loans not paypal). It is still posible to transfer funds through traditional banking channels electronically the same day. Most financial institutions can't hold customer funds without paying for the privilage. But, look as I might I just can't seem to find a button on ebay from my credit union.
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