This thought occurred to me the other day, as the sales of the stuff packages have led to a little buildup of money in my Paypal account that I have not yet converted to actual folding money. How much money sits in the Paypal system in steady state? They charge for some of their services, but I wonder how much money they make from the interest on the float of the cash that sits in their system before you take it out. If you have 10 million users that have an average of $100 sitting in their accounts, that’s a billion dollars. Now you are starting to talk about real money, kids.
Paypal
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This is similar to American Express, who invented the concept with their Ttravellers Checks… For some years the float was their one major source of income. Not only the interest. After Paypal guys understand the consumption patterns they’ll also take out some of the money and put it in investments that yield even more money, like stock markets bonds etc. Then we are talking some serious money. Though I don’t think they’ll have that many users as of today, but someday…
Did you do know you can have your funds in a money market? Login and click the link that says, “Earn a return on your balance”. The Paypal gnomes will automatically sweep your funds into the money market account, and pull them back out as needed. Be sure to read the Prospectus before investing.