I have mixed feelings about PayPal. I believe their percentage based fees are unacceptable. Generally when electronic banking transactions occur, in the background there's actual "physical" money being transferred (aka, notes). However, because this transactions occur between trusted sources, an advance can (and often does) occur, resulting in the money being available immediately. The fees are generally for to cover the infrastructure costs of these transactions.
The way PayPal operates, it is VERY obvious they put unacceptable holds on accounts to generate revenue from interest. That being the case, the fact that they also choose to charge a percentage based fee (and the high percentage they charge) is shady at best.
I do not necessarily agree with their business practices, however, their concept and exclusive affiliation with eBay is actually quite convenient to frequent buyers/sellers. I have never had any issues with them (knock on wood also), other than disagreeing somewhat with their revenue model, and actually prefer auctions that allow PayPal as a form of payment. Sometimes the seller will request the addition of 3% if PayPal is chosen to cover their fees... If the seller provides other options, I think it's fair for them to request that.
