The principle for PayPal is really pretty simple. I think of it as just an online savings account, sort of like a money market account.
The process to open an account is extremely easy. They pay you a certain % on your money that you have in your account every month. It fluctuates with prime, and when I first started using PayPal the % was around 4.5% for basically doing nothing. The signup process involves divulging a lot of your personal information such as name, address, bank information, etc..etc... To fund your account all you have to do is request a withdrawal from your personal checking account from your home bank into PayPal's interest bearing account. There are no charges are fees for this service. It is COMPLETELY FREE! I usually deposit my payroll check into my checking account at my home bank. I then take a certain % of my check and request that PayPal do an automatic draft for a certain amount of money from my personal checking acct. The electronic process take anywhere from 2-3 days. PayPal charges ZERO fees to do this transaction which is great! I transfer the money from my checking acct. to my PayPal account simply b/c I'm not earning any interest on my checking account, and I am on my PayPal account. Kind of cool watching your account grow and grow each and every month. It's also pretty cool that my wife has NO idea that that money is there.
PayPal keeps a complete transaction history of all their electronic drafts from your personal checking or savings account. The really cool thing is the fact that more and more online vendors are beginning to accept PayPal as a form of payments or a means of funding a particular account such as VIP. The whole process with VIP last night took less than five minutes, I chit you not!!! If there is a better way, I haven't found it yet!!!