Interesting thing happened to me a couple of years ago.
I went to another state to pick up a car I had bought. I needed to pull $10k of
my own money in cash out of the my banks to pay the seller. I checked with the banks before I left to make sure it would be OK.
I arrived in Utah to meet the seller and we go to the bank to do the transaction, and my banks suddenly don't want to let me cash out that much money. I ended up having to kludge the transaction together with some my cash and credit card advances. I didn't quite make the full sale amount so the seller let me take the car and sent me the pink slip later.
Second fact: online banking used to do instant bill pays. Now anything above a trivial amount has to be scheduled. It didn't used to be that way.
Combining these two suggests to me there is a liquidity shortage in the retail banking system. Paypal may be under the same liquidity pressures and using fuzzy TOS reasons to hold money because they don't have the liquidity to handle all of their transaction demand.
The bank workers told me they don't keep a lot of cash on hand to minimize robberies.
The thing I wonder about is why did online banking start requiring scheduled payments for anything over a $100 or so about five years ago? Now they often make me wait a few days to clear a payment, unless it's internal to the bank itself (e.g. my checking account to pay off my same bank cc account).
I'm sure they're investing my money short term and the holds give them more time and flexibility to do so. However, tying up account money in short term invesments means their liquidity will be reduced.
If you were PayPal would you not invest user funds overnight (or longer) based on projections of inflow/outflow? If not you'd be cheating your shareholders. However the temptation to hold on to user funds as long as possible would be constantly present. That's almost certainly what's happening.
I went to another state to pick up a car I had bought. I needed to pull $10k of my own money in cash out of the my banks to pay the seller. I checked with the banks before I left to make sure it would be OK.
I arrived in Utah to meet the seller and we go to the bank to do the transaction, and my banks suddenly don't want to let me cash out that much money. I ended up having to kludge the transaction together with some my cash and credit card advances. I didn't quite make the full sale amount so the seller let me take the car and sent me the pink slip later.
Second fact: online banking used to do instant bill pays. Now anything above a trivial amount has to be scheduled. It didn't used to be that way.
Combining these two suggests to me there is a liquidity shortage in the retail banking system. Paypal may be under the same liquidity pressures and using fuzzy TOS reasons to hold money because they don't have the liquidity to handle all of their transaction demand.