General Question

valdasta's avatar

How does Paypal make money?

Asked by valdasta (2139points) February 20th, 2010

Do they charge for service at all? Do they charge you a percentage of your purchase or sale? Do they make their money soley from advertisers?

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12 Answers

Rarebear's avatar

My understanding is that they hold the money in a short term account and delay payment. They make the money on interest earned. I could be wrong on this, though.

fireinthepriory's avatar

There’s no charge for just having one, linking cards/bank accounts to your paypal, or buying things. If you go to their web site they tell you exactly what they do charge for. I forget what exactly they charge for, but it’s somewhat obscure things… stuff like transferring bank funds I think?

Parrappa's avatar

I believe they take a certain percentage of all incoming money. I could be wrong though.

jrpowell's avatar

They charge around 3% + 30 cents for any money sent to you. So if someone sends you $100 they take around $3.30 leaving you with $96.70.

The rate goes down a bit the more is sent to you. I think if the transaction is over $100,000 they only take 2 percent.

edit :: Found the link.. I was close.

lilikoi's avatar

I think also that if you pay to use the service, those fees are waived.

thriftymaid's avatar

They hold payments for several days before forwarding them. They are able to reap interest on it during that time. They also charge a percentage in all but one classification of their accounts.

laureth's avatar

Speaking as a seller who has used PayPal, I’ve never had a delay between the person paying me and that money showing up in my PayPal account.

thriftymaid's avatar

@laureth Of course not. The delay comes when you want to withdraw it immediately to your bank. Paypal will hold it several days before doing the transfer.

laureth's avatar

Holding funds a few days during inter-bank transfers is an industry standard, even between two non-Paypal banks.

valdasta's avatar

Thank you for the answers everyone.

I wouldn’t mind making 2% of 100,000…

sofia2010's avatar

When you send money via paypal , paypal gets a certain amount of fe out of it. that’s how they make money.

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