How do apps like PayPal, Google Pay etc. earn money?

Peer to peer transactions on Google Pay transfer the complete amount to the receiver so apparently there is zero commission involved. (For example, if person A pays 100 dollars to person B through such an app, person B does receive 100 dollars exactly).

The only way to earn money i can see is advertisements, but is the ad-revenue really enough to sustain a full fledged payment service?

These apps are regularly and widely used.To clarify, i am not asking this question based on a specific app. I am looking for a more generalized answer. How is this business run exactly?

Where do they get money from?

  • I imagine any company that is holding money on behalf of its "customers" is free (within limits set by government regulations that are similar, it not identical, to those placed on banks) to use the money for investment, loans, etc, as long as they keep enough on hand to satisfy customer demands for withdrawal.
    – chepner
    Commented Jul 11, 2023 at 14:09

2 Answers 2


Generally, these person-to-person transfers are loss leaders that allow the companies to get customers that will use other services. If you sign up for a PayPal account so that you can make free transfers to your pals, you may be interested in using that account to pay merchants which will have a fee. Your pals may not bother to transfer the money you send them to their bank account, leaving a balance on their account that the company can leverage like a bank. You may decide that you want to buy crypto and hold it in your PayPal wallet which also generates fees.


Many charge a fee for the service, just as other credit card processing does. The seller usually has that fee deducted from the amount they receive, but if you are sending money to a friend or a charity you will sometimes see a choice that lets the payer cover that cost.

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