PayPal uses the ACH (automated clearing house) process, which is a funds transfer system governed by the NACHA operating rules which provide for inter-bank clearing of electronic payments for depository financial institutions who participate, the federal reserve (the United states Government) and electronic payments network are the ACH operators with central clearing facilities, An ACH transaction is processed electronically whereby it streamlines deposits and improves cash flow by electronically depositing funds directly into a bank account. If PayPal were able to hold those funds and collect interest they would have enough capitol to rule the world, but the US gov't still wants to rule the world, so they are holding your funds, you, I, PayPal, we are just pawns in this financial game, I hope this helps clear up your question.
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