<H1>So what's the big deal here? Why should i care?</H1> Here's a little interesting background on PayPal's "Instant Transfer" process: To implement Instant Transfer, PayPal authorizes the transaction amount on the user’s credit card without clearing it, [to avoid] taking the risk that the transaction would not be paid. Following the implementation of Instant Transfer, credit card funding declined markedly. source: http://itp.nyu.edu/blogs/js960/2008/03/01/reading-4/ If this is true, then when you allow PayPal to do "instant transfers", they are using the security of your card to make a huge additional profit while the card company is taking most of the risk. Yet the card companies never see any of that profit because the transactions are settled only if the instant transfer falls through. PayPal benefits because they still charge the seller the same high percentage as if it occurred with a credit card, yet PayPal does not have to pay their dues to the card companies which settle the transactions, eliminating the highest part of their overhead in any given transaction. Very slick - and yet it robs you of the primary benefits of using the card: delayed payment and rewards such as air miles and cash back. The final insult with instant transfer is that since your card is authorized anyway, those authorized funds are not available for your use. Since there's no real advantage to instant transfer, you might have just as well used the card! <h1>So what's the big deal here? Why should i care?</h1> Here's a little interesting background on PayPal's "Instant Transfer" process: To implement Instant Transfer, PayPal authorizes the transaction amount on the user’s credit card without clearing it, [to avoid] taking the risk that the transaction would not be paid. Following the implementation of Instant Transfer, credit card funding declined markedly. source: <a href="http://itp.nyu.edu/blogs/js960/2008/03/01/reading-4/">http://itp.nyu.edu/blogs/js960/2008/03/01/readi...</a> If this is true, then when you allow PayPal to do "instant transfers", they are using the security of your card to make a huge additional profit while the card company is taking most of the risk. Yet the card companies never see any of that profit because the transactions are settled only if the instant transfer falls through. PayPal benefits because they still charge the seller the same high percentage as if it occurred with a credit card, yet PayPal does not have to pay their dues to the card companies which settle the transactions, eliminating the highest part of their overhead in any given transaction. Very slick - and yet it robs you of the primary benefits of using the card: delayed payment and rewards such as air miles and cash back. The final insult with instant transfer is that since your card is authorized anyway, those authorized funds are not available for your use. Since there's no real advantage to instant transfer, you might have just as well used the card!

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