Tuesday 15 May 2012

how does paypal work? - answered

As my friends use paypal now, they used to ask me how does paypal work.

Here's how. WHen you pay money into a paypal account, Paypal stored your money as numbers on its database. It's like having an IOU. I owe you.

THen when you transfer your money, all you are doing is transferring numbers from one account to another.
When you withdraw money, paypa transfers numbers to your bank.

All money is is an IOU anyway - paypal money is the same as 'real' money - just a promise to pay in the future on demand the sum of x.

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