Is PayPal a Bank?
In 2006, PayPal conducted more than $13 billion in business transactions not even related to eBay. Because of the large amount of funds it holds, many people falsely believe PayPal qualifies as a bank.
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Identification
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The federal government does not consider PayPal a bank because it does not hold a banking charter, nor does it accept deposited funds, as a bank does. Instead, users fund their PayPal account with money from their bank account.
Considerations
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Some states, such as California and Louisiana, believe that PayPal acts like a bank and that the federal government should consider it one. As of 2009, no state has forced PayPal to get a state-sanctioned charter.
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Features
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While not a certified banking institution, PayPal does have many of the features of a typical bank. It issues debit and credit cards, offers payment services and pays interest on its money market accounts.
Fun Fact
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PayPal accounted for 6 percent of all online transactions in 2006, according to BusinessWeek.
Expansion Plans
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In the near future, PayPal plans to start offering services, such as allowing a bank's customers to send money to an email address, through brick-and-mortar financial institutions.
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References
Resources
- Photo Credit Image by Flickr.com, courtesy of Casey Serin
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Comments
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may I apply for the paypal account then u save money there darwin daquioag.
