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Paypal chewed through something like $100million (cant remember the exact figures off the top of my head).
In my past life I was involved in the development of a similar system - the programming costs alone were $5million.
The millions of $$$ that Paypal has in its float actually doesnt make alot of money - stuff all in fact. But the fees they now charge do.
They have had significant fraud problems in the past (they lost $7million in one case to a few Russians) hence the reason they now lock accounts readily.
They are still borderline, Mastercard hates them, Visa has had issues with them and then there is all the various attempts to make them a bank or prohibit them operating in certain localities.
The competitors like Firepay are no where near what PayPal is or was. There are a lot of limits on the use of credit cards to fund accounts which is essentially the risky part both due to the costs involved and the chargeback issues.
PayPal has it locked up though - you wont see anyone else come close to the user numbers they have anytime soon.
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