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Isn't the Paypal account linked at the recieving end to a bank account with checks and/or debit card? How does the money transfer? Do they send checks? I don't know.

PayPal buyers give a credit card number to PayPal. This is used to make a charge, and electronically transfer it to the seller. The advantage is the seller does not have to be authorized by the credit card company, but can still display credit card logos. And the processing fee the seller pays is about half what credit companies charge.

Buyers can also "link" their credit card to a bank checking account. This provides for "instant" transfer of funds, because PayPal sends a debit to the buyer's bank account. If it bounces, PayPal charges the credit card, instead. PayPal makes money on the modest fees they charge sellers, and on the "float" (usually about 3 days) between the time the seller withdraws the funds, and they appear electronically in his bank account.

All-in-all, pretty slick, and a good deal all along.