Paypal like many financial institutions are not transparent in their handling of funds to and from bank accounts, they do hold your funds for several days after receiving said funds from your bank. They attempt to use tired old adages that the Fed is holding the funds this is simply not true. Reality is they utilize your funds for several days for their own purposes.
Beware of PayPal look-alike e-mails immediately after your first use. Whoever you send money to WILL NOT be as careful about your privacy as PayPal is. Your address will be sold or intercepted and PayPal's logo, etc., will be used as a phishing scam. Always check the message source of every e-mail that looks like it comes from PayPal!!!. (Or anyone else for that matter.) Report suspected phishing scams or nothing can be done about them. PayPal is also very good about checking on any suspected fake e-mails and getting back to you promptly if you forward the e-mail to them questioning it.
Make sure you request the FULL terms of service, and go through them with somebody who understands the language before you sign up, or use their service. At the least you are giving up multiple rights, as well as handing over the power to freeze your credit cards & bank accounts on any "suspected illegal or fraudulent" activity. "Suspected" can cover a lot of innocent actions, which will get sorted out, but the harm caused by having your accounts frozen for 90 days while it gets sorted out will never be reimbursed.
Horrible Customer Service. As a seller of eBay I've done my duties 100%. Buyer got the item via USPS with signature confirmation & my payment is still under pending status just because buyer is too lazy to respond any of my emails & fail to leave me a positive feedback or any feedback for that matter!
PayPal's just replied my complaint with an AUTO-RESPONDS email! 100% FAIL AS A BUSINESS ENTITY IN THE CUSTOMER SERVICE DEPARTMENT!!!
I use paypal because I do not have/want a credit card, and I need to be able to recieve online payments.
I have read a lot of customer experiance stories, and it seems paypal is very flawed. They also end up costing you quite a bit in transaction fees, and I started recieving spam a few days after signing up. How the spammers learned I used paypal I will never know....