Date: Thu, 3 Feb 2005 20:58:16 -0800 (PST) From: Donald Gillies <gillies@cs.ubc.ca> To: classicrendezvous@bikelist.org Subject: Re: [CR]Ebay / Paypal policy
Actually, Paypal was founded (by a U-Illinis alumnus) based entirely on the interest earned from the "float" in your paypal accounts. They used to do a several-day float between the time you paid for something and the time the funds were able to be withdrawn from paypal - no matter where the funds were transferred within paypal. I think as long as the money stayed in the paypal accounts for at least a few days thats all they needed to run the paypal business.
Unfortunately, when alan greenspan lowered interest rates to 1%, the interest from money market securities became so mall that paypal lurched towards bankrupcy and ebay picked up the entire web site and business infrastructure at a bargain price.
funny how the king of bankers wiped out paypal. I wonder why ?? I think you and I all know why !!
IMHO paypal is still really close to offering an alternative to bank credit cards (which are a TOTAL ripoff with a 3% transaction fee now that interest rates are 2% per year or so ... if a lender can turn over their monetary inventory 12x a year they are earning a 25% return almost risk free ... sheesh.)
- Don Gillies San Diego, CA
PayPal charges a fee for the vast majority of their transactions. They live on fees, just like the rest of the mainstream banking industry does these days. It costs me roughly the same to take PayPal (cash or credit) or Visa/Mastercard (directly) from a customer - around four percent (total, actual, net cost).
Since US Gov't. deregulation of the credit-card industry (decades ago), usury laws don't apply to credit-card "lending" any more, unfortunately, so almost nothing that they might do is illegal. Some folks are paying as much as 40% (!!!) interest on their credit-card debt.
eBay paid over one Billion US Dollars for PayPal, IIRC.
Greg Parker
Dexter, Michigan