Just discovered this post from the archive which clears up everything.
"I understand we signed the agreement to use Paypal for the sake of convenience. And I fully accept that.
But this is not a matter of simply "A lot going on behind the scenes" as if there are legalities that Paypal has to perform. That may be what they tell you reps, but it's actually more of a matter of business strategy. This is what I do for a living, so I'm quite clear on how this works. In my line of work, I deal with brokerage clearing houses, capital markets, brokers and banks.
Transfers could be instantaneous. Absolutely instanteous. Perfectly legal, and I transfer money instanteously myself all the time. The problem, is one of cost. Paypal wouldn't be able to make any money that way. So I understand, Paypal has to make their money. But there is no 'legal requirement' to hold the money 3 or 4 days. That's simply not true.
Paypal is in the business to make money. The money that paypal has at any one time, they take a percentage of that and buy short term paper. Which is exactly that. Commercial paper of the credit markets with a return for a very, very short time period for a specific return. And I understand the 3 or 4 day time frame is not really Paypals "fault". With prime funds where they are at, the only short term paper that Paypal can make any money from is on a longer time period. Thus, that money is held for 3 days rather than 24, so Paypal can make more on their money; since they are dealing in very much a "volume" business. At least until interest rates go back up. So there is really no advantage to referring a refund case to the BBB. Paypal i sstuck, because with prime fund interest rates so low, the only way Paypal can make ANY profit whatsoever is to buy longer term commercial paper for the return, which is going to torque off their customers in such situations that a refund takes place. Sellers don't want to make their clients wait for refunds, so sometimes they are a little too quick to refund the money, before something can be worked out (that one has happened with me), and then there is the buyer in the middle. Paypal is just stuck with buying the paper that they can make the money with, so that they can continue to provide the service.
As someone that is waiting for my refund to clear, it's just that I resent that this is somehow framed in the context that Paypal could not (as if it was a legality or something) transfer the money sooner if they wanted to."
So there you have it.
