# How Does PayPal Make Money? **URL:** \ **Category:** Factual Questions\ **Created:** [October 3, 2000, 1:48am UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433 "2000-10-03T01:48:31Z")\ **Posts on this page:** 10\ **Page:** 1
**Author:** ![Markxxx](https://avatars.discourse-cdn.com/v4/letter/m/5daacb/32.png) [@Markxxx](https://boards.straightdope.com/u/Markxxx)\ **Post date:** [October 3, 2000, 1:48am UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/1 "2000-10-03T01:48:31Z")
Thanks for any info. ---
**Author:** ![Hanna](https://avatars.discourse-cdn.com/v4/letter/h/b3f665/32.png) [@Hanna](https://boards.straightdope.com/u/Hanna)\ **Post date:** [October 3, 2000, 1:58am UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/2 "2000-10-03T01:58:29Z")
I think they make it on the “float”, the time the money stays in their system to the time you take it out. I’m not positive though. ---
**Author:** ![xizor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xizor/32/102_2.png) [@xizor](https://boards.straightdope.com/u/xizor)\ **Post date:** [October 3, 2000, 2:06am UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/3 "2000-10-03T02:06:35Z")
Do the selling companies pay a fee to use it? That is what Visa & MC do. ---
**Author:** ![Hanna](https://avatars.discourse-cdn.com/v4/letter/h/b3f665/32.png) [@Hanna](https://boards.straightdope.com/u/Hanna)\ **Post date:** [October 3, 2000, 2:30am UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/4 "2000-10-03T02:30:42Z")
A personal account is free (so far). They do have business accounts that take a certain percentage (4% or 5%, something like that) of each transaction. I don’t know where thay draw the line…I have a personal account and use it for eBay, I don’t operate a business. I have used my personal account both when I’ve sold and bought stuff on eBay without getting charged. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [October 3, 2000, 4:38am UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/5 "2000-10-03T04:38:35Z")
PayPal charges its business accounts 1.9% plus $.25 for each transaction. They also offers features to business accounts that are not available to personal accounts. They are now “requesting” that all sellers upgrade to a business account, but in light of their “always free” policy when they started, there has been some backlash (to put it mildly) from long time users. ---
**Author:** ![douglips](https://avatars.discourse-cdn.com/v4/letter/d/e68b1a/32.png) [@douglips](https://boards.straightdope.com/u/douglips)\ **Post date:** [October 3, 2000, 7:17am UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/6 "2000-10-03T07:17:40Z")
The float should be tremendous - it takes something like a week for them to pay you when you ask, so they have your money for that long. So, they are collecting interest on a seven day moving average of daily transactions, at the least. ---
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [October 3, 2000, 3:29pm UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/7 "2000-10-03T15:29:52Z")
Yeah, but don’t credit card comps charge 4% interest? Who knows they they make money on that. Look at [Amazon.com](http://Amazon.com)! ---
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [October 3, 2000, 3:33pm UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/8 "2000-10-03T15:33:00Z")
Also, Im pretty sure that [paypal.com](http://paypal.com) is used for illegal transactions by the tons. It’s easy & there is no check. One could probably launder a lot of money with them, right? Because it takes 8 weeks to convert UK money to US funds, using [paypal.com](http://paypal.com) you can do it in a week, I guess, right? ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [October 3, 2000, 5:14pm UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/9 "2000-10-03T17:14:38Z")
> [@](#): > > \*Originally posted by douglips \* > **it takes something like a week for them to pay you when you ask, so they have your money for that long.** I sell a lot of stuff on eBay, and many of my customers use PayPal. In my experience, it takes just three days to transfer payments into my checking account. If it takes you longer, the problem is with your bank’s ability to process direct deposits, not PayPal’s desire to enhance the “float”. > [@](#): > > _Originally posted by handy \*\*\* > Because it takes 8 weeks to convert UK money to US funds, using [paypal.com](http://paypal.com) you can do it in a week, I guess, right?_\* PayPal does not yet accept international payments, so I guess this is just speculation. > [@](#): > > _Originally posted by handy \*\*\* > Also, Im pretty sure that [paypal.com](http://paypal.com) is used for illegal transactions by the tons. It’s easy & there is no check. One could probably launder a lot of money with them, right?_\* I don’t see how it would be easier, because PayPal doesn’t accept cash. The “dirty” money would have to be deposited in a bank account, or paid to a credit card in order to transfer it into a PayPal account. If you have to do that, what do you need PayPal for? ---
**Author:** ![Skott](https://avatars.discourse-cdn.com/v4/letter/s/b4bc9f/32.png) [@Skott](https://boards.straightdope.com/u/Skott)\ **Post date:** [October 3, 2000, 7:28pm UTC](https://boards.straightdope.com/t/how-does-paypal-make-money/35433/10 "2000-10-03T19:28:43Z")
From [http://www.paypal.x.com/cgi-bin/webscr?cmd=p/hlp/help\_global-outside](http://www.paypal.x.com/cgi-bin/webscr?cmd=p/hlp/help_global-outside) > [@](#): > > **How does PayPal make money?** > > PayPal offers its consumer payment services free of charge. Many consumer customers have chosen to keep a balance in their PayPal account. These balances are kept collectively in a high-grade money market mutual fund. The interest paid on this account is a PayPal revenue stream. PayPal offers premium services at low rates for businesses and will provide additional international and vendor services in the future. PayPal may also pursue strategic partnerships that allow us to create other financial service revenue streams.