Does Paypal & other money sending websites make money of interest?

[Andy]

When you set up an online account & transfer money to it from your bank account, I'm assuming the no dy goes in to a bank account that PayPal owns. If so, do they make money from the Interest accumulated in the bank before you make a transaction & the funds are transferred?

[Windowphobe]

Of course they do. It's just like the way your bank lends out the money that's credited to your account, or your insurance company invests the premiums you pay. You can even do this yourself with a cash-management system to keep unused funds rotating in and out of a money-market (or other) account.