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How does PayPal make money?
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Please briefly explain why you feel this answer should be reported .
It’s amazing just how inaccurate most of the people answering the question are.
When you use a credit card, the majority of the 3.2% being paid actually goes to the credit card company, not paypal.
Paypal makes it money from two areas.
In effect, paypal has set itself up to be a bank/credit card company without the same level of oversight or legal responsibilities that those corporations have.
Paypal grew leaps and bounds by being tied into the the ebay infrastructure which destroyed the option for people to use normal checks and made it very, very hard for any other epayment processor to come into existence. You don’t even see google payments as an acceptable option to use as an alternative and they scared google off of forcing the issue by threatening to stop using the platform for advertising. If you are a merchant you can use your own credit card processor, but its set up to be a bigger hassle for the customers who default to paypal.