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 They used to do a several-day float between the time you paid for something and the time the funds were able to be withdrawn from paypal - no matter where the funds were transferred within paypal.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