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Paypal is a great service, I like it.
But in the context of things, here's my two cents --
First - Paypal is NOT a threat to banks. Paypal is not another bank, NY I believe already tried to force them into being declared a bank since ANY money deposited with them has no guarantee of remaining there, is completely uninsured and could be lost.
The reason the cc's have issues with Paypal is pretty much the same -- adding money to Paypal is considered a purchase the way they are categorized, when they are generally just aggregating money in and disbursing it at a later date. Therefore all the money added into the Paypal system via credit card could become chargebacks for the cc's if Paypal were to go under and not have the money to reimburse on deposits.
The government is not too hot on Paypal. Mainly because there is no way to track where money spent thru their system goes -- meaning that internet gambling and other transactions in the US can be facilitated using Paypal without regulation.
As I said I love the service but I am not so silly as to figure things will just keep running along like they have to date, otherwise Paypal will find themself on the short end of the stick with forces they cannot overcome.
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