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It is more correctly termed the “private sale exception”.Quick(ish) background in U.S. Federal gun law (if this is nothing new to you, skip to the bold text about halfway down). Two major laws in 1968, the Omnibus Crime Control and Safe Streets Act and the Gun Control Act, restricted interstate trade in firearms based on the Federal government’s Commerce Clause powers. The GCA established a licensing scheme, the Federal Firearms License, for those who made a living having to do with making, transporting or selling firearms, and the OCCSSA prohibited any interstate transfer of firearms, with the subsequent GCA re-legalizing transfers between FFL holders and additionally requiring firearms manufacturers to initially transfer their newly-manufactured guns to an FFL-licensed dealer before they can be sold at retail (different license types; a manufacturer license allows you to make but not sell and a dealer license just the opposite). It also heavily restricted imports of firearms using a “points” system specifically targeting small handguns, and, perhaps most germane to our discussion, it criminalized any sale, gift, or other permanent transfer of a firearm to anyone the transferor (seller, giver) knows or has reasonable cause to believe is a convicted felon.Now, that’s all well and good, until you try to actually enforce any of this. One of the biggest problems is that we do not tattoo “CONVICTED FELON” on the foreheads of convicted felons; something about the 8th Amendment prohibition on cruel and unusual punishment, possibility of wrongful conviction and exoneration, the possibility and imperfect nature of tattoo removal, etc. Even the most advanced background check systems available to police were often not available to FFLs, and in the minority of cases where they were, they only covered that one state. It was therefore very hard for an FFL to demonstrate any due diligence in making sure their buyer wasn’t a felon, and if they did there were so many holes in the system that it was still a crap shoot whether a customer had a clean record. These laws were also ambiguous in several ways, like not defining who is “engaged in the business of firearms” and therefore needs an FFL, or what is or isn’t an “interstate transfer” of a firearm that requires an FFL to be involved in moving it; in the absence of clear definitions, the ATF got to fill in the blanks, and court challenges tended to go in predictable ways based on the ideology regarding guns in the local populace.The Firearm Owner’s Protection Act of 1986, or FOPA, is lampooned by many gun owners for its inclusion of the Hughes Amendment which bans all civilian sales of machine guns manufactured after May 1986, but if you look past that it did do a lot to actually protect gun owners. A “peaceable journey” provision made it clear that it was legal to cross state lines with a gun if you were travelling from anywhere you could lawfully possess it, to anywhere else you could lawfully possess it, and the gun was unloaded and in a locked case or separate area of the vehicle inaccessible to passengers. It also clarified that “engaged in the business of firearms” definitely does not apply to “occasional sales or trades in furtherance of a hobby or casual interest in firearms”. Still ambiguous, but easier to demonstrate that you weren’t running a gun shop out of your garage, as long as you didn’t have a sign over your garage saying “Buy/Sell/Trade Guns & Ammo”. Lastly, it contained other clarifications of terms and explicit limitations on their applicability which the ATF had been abusing to put people in prison for technical violations, like paperwork typos, not made in a malicious manner.However, the “knew or reasonably should have known the other guy was a felon” language of the GCA remained a problem both for gun dealers and the ATF. Where judges and juries leaned pro-gun, crooked FFLs walked, and where sentiment leaned anti-gun, honest business owners lost their license, their freedom and their gun rights because they sold to a guy whose rap sheet from three states over could never have been obtained by that FFL at the time, but in hindsight looks pretty obvious to a jury. The lack of a standard, nationally-available way to prove gun sellers were doing their due diligence remained a problem into the 90s.Enter the Brady Handgun Violence Prevention Act of 1993, aka the “Brady Bill”. Background checks became mandatory for all sales of firearms involving or mediated by an FFL, which includes all sales of newly-manufactured guns, all interstate sales, and any resales of trade-ins or consignment sales brokered by the FFL regardless of the location of the gun’s previous owner. The Brady Bill also increased the criteria that made someone a “prohibited person”, including not just felons but drug addicts, legally insane persons, those involuntarily committed to a mental institution, non-citizens (exceptions for legal permanent residents). The Lautenberg Amendment would add domestic violence offenders to the list of prohibited persons in 1996.The Brady Act required all states to make their criminal records and other records of disqualifying statuses accessible to FFLs, and originally mandated a 3-day waiting period, which would be used by the gun owner to call around to all 51 legal jurisdictions in the U.S.. The NRA said “uh-uh”, and instead negotiated for the creation of a call center run by the FBI and connected to the FBI’s “Interstate Identification Index” and “National Criminal Information Center” databases maintained at a facility in West Virginia. This new “National Instant Check System”, or NICS, gave gun dealers a tool they could use to find information from all 50 states, DC, the Federal Department of Justice and Department of Defense criminal records that indicate the person is disqualified from owning or possessing a gun, and it made that information available on a while-you-wait basis.Once this system came fully online in 1998, the 3-day wait was dropped, and instead it became a crime for FFLs not to use it; transfers without a clean NICS check, or any other proof of a clean criminal/mental background as the States may see fit to provide or require, are a felony whether the person’s clean or not. The benefit is that if an FFL uses the system, it says “proceed", and it turns out the guy is actually prohibited, the seller is legally covered (which has unfortunately happened, most notably in the case of Devin Kelley, the Sutherland Springs church shooter, who passed at least three background checks despite a court-martial conviction for domestic violence resulting in a BCD).And now, we get to your question. FFLs are required to use NICS to vet their customers. However, those not “engaged in the business of firearms”, selling just one or two from their personal collection to another person that lives in the same state they do, do not have to use this system, and in fact the NICS system cannot be accessed by anyone without an FFL.This is the “private sale loophole”; one person who doesn’t buy and sell firearms as a reliable source of income can sell a firearm to another person living in the same state who also doesn’t deal in them for a living, and while it’s still a huge no-no for both people if the “transferee” receiving the firearm is a known prohibited person, a background check is not explicitly required in this case under Federal law. Most “private sales” are face-to-face transactions with no connection to an organized gun-related event.It’s commonly called the “gun show loophole” because of the mistaken impression that gun shows work like swap meets or flea markets, where people just show up and buy/sell/trade with each other. In reality they are little more than a collection of remote locations for local gun stores, and as FFLs those booth operators must still vet every buyer when selling an actual firearm, therefore better than 95% of all sales that occur at gun shows are vetted.The criticism, of course, is that anyone denied a gun purchase from a gun store because they failed their background check can just go find someone on Craigslist that is selling a gun, show up, hand over the cash and they have a gun. The lack of vetting of private sales also further enables “straw purchases”, where people who can possess guns legally buy them, and then turn around and sell/give them to people who can’t pass a NICS check. Even if caught, the “transferor” can plausibly say they didn’t and couldn’t know the guy was bad news*. Straw buys are believed to account for about 30% of all guns used in violent crime, second only to stolen guns (most of those also suspected of being straw buys with the “theft” being legal cover), so it’s a pretty big deal.Why don’t these transactions require a background check? Good question. Reasons:The bulk of Federal gun law, other than the NFA, rests on the Federal government’s powers to regulate interstate commerce under the Commerce Clause. Several notable Supreme Court cases have increased the scope of these powers considerably**, however there are still limits. The question of Congress’s control over sales between two private citizens within one state (neither in nor affecting interstate commerce) has not been considered recently enough to take some notable Commerce Clause-related rulings like Gonzalez v. Raich into account, and it remains an open question whether intrastate private sales fall under Federal scope of authority under any combination of its enumerated powers. So far, Congress and the ATF have been unwilling to test these waters for fear of being rebuffed by SCOTUS, which would likely have broader implications on the Feds’ powers in general.More practically, as of its creation, the Internet was still relatively young, and service-based data interchange still a new concept. Now, of course, almost everything on the Internet has a service-based API, but in the mid-90s and even for a decade thereafter, the best available method for FFLs to access NICS was a call center, meaning it needs human staff taking calls, inputting information relayed verbally from the 4473 by the FFL and verbally giving the results of the check.For a “customer base” of 140,000 FFLs ranging in frequency from a couple calls a week to several a day, that’s manageable. Up until the runup to the 2008 election, new gun sales averaged about 3 million a year, which is about 8,250 calls a day, 820 an hour in a 10-hour day, each call takes about 15 minutes, so a call center pool of about 200 people can keep pace. The Feds have much larger call centers than that for the IRS, VA, USDA etc, and by the time gun purchases ramped up significantly in the Obama Administration, many FFLs had software that interfaced with “eNICS”, an online version of the NICS call-in that reduces turnaround time.For 70 million gun owners that would need to call in every time they sell, lend or gift a gun to a person not explicitly exempted by the law, a system plenty large enough for the FFL user base, even with the current electronic supplement, would quickly grind to a complete halt beginning around mid-September and continuing through January, as a combination of deer season and the holidays create a perfect storm of firearms transfers.Even with more modern communications channels allowing very high volume of requests and high rate of data transfer, in information security terms, NICS is an “oracle"; a source of information from “beyond”, useful for purposes beyond its intent including direct contravention of the very system the oracle is a part of. As just one example, all you need is a list of names, addresses, DOBs and POBs, and if you have NICS access and sufficient time/bandwidth to run them through, you now know who among those people can legally own a gun and who cannot. This circumvents the intent of the system from being used on a case by case basis for actual potential buyers, to become a means of publicly exposing people the government has some really good reason to deny buying a gun. Various media outlets have already shown themselves to be willing and able to abuse online databases in “doxxing” stories about people or issues of public interest, and guns are nothing if not an issue of public interest.Logistically, the 4473 form currently used by FFLs as proof they did their due diligence is identity theft on a silver platter. Full legal name, address, date of birth, place of birth, SSN/TIN, height, weight, gender and ethnicity; with a photo of a person roughly meeting those appearance criteria, you could take out a mortgage in that person’s name. FFLs are required by law to safeguard this information for a minimum of 20 years before it can be destroyed, the methods of safeguarding require physical and information security similar to financial and educational institutions, and they have a lot to lose if they fail in any way. Extended to private sales, you're now requiring that same level of protection of buyer information for everyone wishing to sell a firearm face-to-face, and there weren't any very good options to make that more convenient at the time the law was drafted.Enforcement of the existing law against buyers and sellers alike is really lax. In 2017, 8,606,286 NICS transactions were performed. Of those, 112,090 were denied, the most common reason being for criminal conviction, something you’re not likely to legitimately not know about. However, only 12,710 of those denials were investigated by the ATF, and just 12 were successfully prosecuted. Meanwhile, in the aftermath of Sutherland Springs, the US Armed Forces JAG divisions ran an audit of courts-martial convictions, and found over 4,000 cases with dispositions that should have been reported but weren’t. That represents more than 6 entire calendar years’ worth of all cleared courts-martial cases across all five service branches under the UCMJ. So the JAG office wasn’t just missing a few disqualifying reports making Kelley’s omission a one-off; it wasn’t even trying. Various State Departments of Justice/Corrections ran similar audits and found more reporting gaps. So, if you’ve been convicted of a disqualifying crime since NICS went online, depending on jurisdiction, the odds may well be better that you’ll pass the background check than to be prosecuted for failing it.I mentioned a few points back that some people or situations would be “exempt” from this check even if it were “universalized”. That’s because any requirement that NICS be consulted every time a firearm changes hands between any two people is ludicrously impractical. People try out other people’s guns on the range all the time; I own guns, you own guns, so we must have passed our most recent background checks and not given the police any reason to round em up since, therefore the odds are pretty damn good neither of us is a felon, crazy, wife-beater etc. Other common exemptions are transfers between immediate family (how “immediate” depends on the exact law; spouses and children of the owner are generally gimmes, but I’ve seen state UBC laws where grandfather-grandchild is OK but uncle-nephew is not), between holders of state CCWs (the permit, especially the fact you still have it in your possession, is pretty solid proof in most states that you’re not even suspected of a potentially-disqualifying crime), at any time while under the owner’s direct supervision, and a few others that generally have too low a chance for abuse to justify how often a check would be needed if required. So, even “universal” background checks wouldn’t be.So, while we have the technology now to vet people from pretty much anywhere we have cell signal, and to provide mathematically provable authentic records of sale, these are developments that entered widespread use long after the Brady Bill was drafted.Since that time, those advocating for increased gun control tipped their hand to gun rights advocates a few times too many, primarily with the Federal Assault Weapons Ban which passed a year after the Brady Bill. The debate over the AWB, and at other times during the Clinton Administration, gave gun rights advocates some doozies in the quote department from gun control supporters, which give the lie in gun owners’ eyes to pretty much any statement made since that attempts to be any less extreme in goals or that describe proposals as “reasonable” or “common sense”. When gun owners have documented attributable quotes straight out of the mouths of sitting Congresspersons that they would pass broad outright bans if they could, that it’s not about crime, and that the master plan is a step-by-step increase in restrictions to get to a point where most or all guns are banned, it’s really hard to get gun owners to the table to talk about “this little piece of the puzzle that’s totally reasonable and common sense”.So, as a result, gun owners, and the representatives in Congress who know these people tend to be pretty motivated voters***, are fairly unilaterally opposed to any further gun control, including expansion of NICS and other background checks. Some, like myself, are willing to negotiate on a quid pro quo basis within the topic of gun laws; we might trade an agreeable implementation of universal background checks**** for, say, national reciprocity and deregulation of certain NFA categories like suppressors. Others, more hard-line, “want their damn cake back - all of it”.These sentiments have stymied pretty much any effort by gun control advocates to get anything new passed at the Federal level since the AWB expired in 2004, including any reform of background check requirements. The only thing that comes to mind that’s had enough support from gun owners to get through Congress is the Fix NICS Act, passed back in March 2018 in the wake of Sutherland Springs, which imposes actual penalties on State and Federal agencies and their management when NICS records for which they’re responsible are found to be out of date, incomplete or wrong. That Act’s primary opposition came from Senate Democrats including Dianne Feinstein, who threatened to kill it if it went to the floor coupled with an act forcing national reciprocity of concealed carry permits (which was the two-bill package deal that passed the House).Can we get there? Probably. But there are hurdles to overcome on both sides; skepticism from gun owners that gun control advocates won’t see an inch given and try to take a mile, and a lack of sympathy towards gun owners from gun control advocates who do not own guns and likely never will, and therefore will never have to jump through any existing hoops to say nothing of new ones. Really, I think the ball’s in the gun control advocates’ court; at a high level, the onus is on them to break the impasse by making some overt, material effort to convince gun owners that preserving gun owners’ rights under the Second Amendment is a priority and not just lip service to flip a couple moderate votes for another restriction. We definitely are not there yet.* IMHO, the primary difficulty in combating straw purchases is that it’s not a crime to have your property stolen. So, anyone suspected of a straw buy just has to say they bought it and then had it stolen by their live-in boyfriend who has dropped off the face of the earth, and of course they had no idea he was a member of the South Side Crips, and the prosecutor has to be able to conclusively disprove one of those two things to overcome reasonable doubt.** Wickard v. Filburn, decided in 1942, held that the Commerce Clause applied to actions affecting interstate commerce as well as those actually involving interstate commerce. Scarborough v. U.S. in 1977, held that regulation of things in or affecting interstate commerce does not have to be closely related in time or scope to the situation in which the article entered or affected commerce; the Feds have authority to regulate anything that has ever crossed state lines for business purposes from that moment until the thing ceases to exist as such. U.S. v. Lopez in 1995 further codified the ways in which an activity can fall under Commerce Clause powers in a three-prong test; if a law regulates or restricts something that actually moves or has moved across state lines, is of a kind that moves across state lines, or significantly affects interstate commerce while not moving in it itself, it’s a valid use of Commerce Clause powers. Gonzales v. Raich in 2005 then held that not only can the Feds use Commerce Clause powers to regulate what does move, has moved or in any way affects interstate commerce, it can also use the Necessary and Proper Clause in combination with the Commerce Clause to regulate things in situations where none of the first three apply, when and to the degree it is “necessary and proper” to do so in the course of enforcing the law in other situations definitely falling into one of those categories.*** The passage of the Brady Act and AWB are generally considered major factors in the GOP winning a bicameral Congressional majority in 1996 for the first time in 40 years, and the first sustained majority since the New Deal. It put legislators on notice that gun owners had more political clout than anyone was willing to admit at the time, and accompanied a “red wave” at the state level which among other things resulted in significant relaxation of ownership and carry laws in most states outside New England and California.**** What’s “agreeable” depends on whom you ask, but a good start is no centralized repository of records (under FOPA, neither State nor Federal governments can be the custodian of persistent records of firearm purchase or ownership because that is a “registry”, though State governments have given FOPA the middle finger pretty much since it was passed), no major long-term identity theft risks from the paperwork involved (name, address and DL# as of the time of sale would be enough for the police to find the next link in the chain, not enough to open a credit card), and not requiring every sale to be FFL-mediated (which would hopelessly clog gun stores with transfer mediation requests, and is a de facto ban on private sales as the FFL might as well be handling a consignment sale).

Summary (tl;dr)To become dual entity: PayPal is already a Licensed Money Transmitter and it will eventually become Licensed Bank in the coming years (with Federal Charter as issued by the OCC - Office of the Comptroller of the Currency).The Long Read...This is a great question and a tough one to answer without any insider information. I'll give it a shot nonetheless!One of the questions most frequently asked is What is PayPal? not so much for the wallet angle, but the company on the whole.Is it a payment systems operator?It is a payment network?Is it a bank?Is it a payment service provider?Is it a payment gateway?Is it an issuer?Is it a Payments Facilitator?Is it a Depository Institution?Is it an FX Broker?Is it a Credit issuing Institution?Is it a Money Transfer Company?Is it a Money Services Business?Is it a Financial Services Company?The simple answer is - it is everything listed above. PayPal's operations are huge. This comes from its progressive growth and its association with Ebay.Some key points regarding PayPal today:PayPal operates in many territories & countries (202 at last count). It has a 47 US Money Transmitter Licenses and also for District of Columbia, Puerto Rico and US Virgin Islands (See PayPal State Licenses).PayPal Europe S.à r.l. & Cie, S.C.A., is a Luxembourg bank licensed by the Commission de surveillance du secteur financier (Source: Luxembourg for Business - Proud to promote ICT)PayPal has the equivalent of a European Payments Institution license (that is what the Luxembourg bank license allows it to do)PayPal is a licensed in Australia as a Restricted Authorized Deposit Taking Institution (See: List of Authorised Deposit-taking Institutions)It has procured the necessary licensure in all the other countries and territories it is operating in. Barring the money-transfer giants like Western Union and MoneyGram and the Card Schemes (VISA, MasterCard), PayPal is the only other institution that has amassed all MSB license and/or a valid operating business license in the places it is doing business.The five change factors that PayPal is going after are:eCommerceChoiceMobile CommerceNew Form FactorsThe Digital Wallet.The key drivers for the future for PayPal hinges on many factors, but the important ones are:FlexibilityIntegration with Point-of-SalesReachPayPal it seems is doing a bit of everything. In some instances the bit of everything may be small in scale (volume/value) when compared to other incumbents, in some instances, PayPal is the incumbent.My bet is PayPal will aim at acquiring a Bank, possibly a credit union, etc. and then turn it around and obtain Federal Charter from OCC for nationwide banking.Banking provides PayPal with access to deposits and utilization of money, that otherwise it cannot touch/invest, due to the current money transmission laws. If you are looking at a parallel example, look no further than GreenDot. Many people may not realize, but GreenDot is both a Bank and a Money Transmitter License holder. (See disclaimer statement screenshot on Greendot website).Here is a snapshot on one of the States where GreenDot does have a Money Transmitter License (Texas):Each has its advantages. For example a Federal Banking license by OCC, exempts the bank from obtaining Money Transmitter Licenses. The funds/money (or unused credit) under the Banking Umbrella can be utilized and invest further, a restriction that does not apply to banks but does apply to money transmitter license holders (like PayPal has at present).Before I conclude, in the paragraphs ahead, it is very interesting to note, that Ebay does not have any money transmitter licenses.Search for Ebay in Texas for MSB Licenses yields nothing...Same scenario in California, where Ebay does not have an MSB.The Independent PayPalThe independent PayPal would definitely seek to become a Bank in the US. It is sitting on access to approximately US$ 20 Billion in unused credit (last quarterly filing by Ebay, numbers specific to PayPal (Source: Note 8 - Commitment & Contingencies - eBay Inc. - Quarterly Report)Also from the SEC filing, the following paragraphs are of prime importance - it very clearly outlines what areas of business PayPal is (via reference to the threats it perceives from the market):PayPalThe markets for PayPal’s products and services are intensely competitive and are subject to rapid technological change, including but not limited to: mobile payments, electronic funds transfer networks allowing Internet access, cross-border access to payment networks, creation of new payment networks and new technologies for enabling merchants, both online and offline, to process payments more simply. In addition, the payments industry is rapidly changing, highly innovative and increasingly subject to regulatory scrutiny, which may negatively affect the competitive landscape. PayPal faces competition and potential competition from existing online, mobile and offline payment methods, including, among others:providers of traditional payment methods, particularly credit and debit cards, checks, money orders and Automated Clearing House transactions (these providers are primarily well-established banks);providers of “digital wallets” which offer customers the ability to pay online and/or on mobile devices, including with mobile applications, through a variety of payment methods, including Visa’s Online Shopping Made Easier by Visa Checkout | Visa USA, MasterCard’s MasterPass, American Express’s Serve, Google Wallet and the Merchant Customer Exchange (MCX) initiative supported by Walmart, Target and other major U.S. retailers;providers of mobile payments solutions that use Visa, American Express and Mastercard's tokenized card data approaches and Near Fields Communication (NFC) functionality, such as Apple's mobile Apple Pay, and Google's Android solution, that uses Host Based Card Emulation (HCE) functionality to eliminate the need for a physical NFC card in the device;payment-card processors that offer their services to merchants, including Chase Paymentech, First Data, Bank of America Merchant Services, Elavon, Vantiv, WorldPay, Barclays Merchant Services, Global Payments, Inc., Stripe and Balanced, and payment gateways, including CyberSource and Home - Authorize.Net (both owned by Visa), SimplifyCommerce by MasterCard and First Data;Amazon Payments, which offers merchants the ability to accept payment card- and bank-funded payments from Amazon’s base of online and mobile customers on the merchant’s own website. Amazon has recently launched a new payment service for online merchants under the name Log in and Pay with Amazon;providers of "person-to-person" payments, that facilitate individuals sending money with an email address, such as Facebook messaging payments;providers of mobile payments, including Softcard in the U.S., Buyster in France, Mpass in Germany, Paym in the U.K., Boku and Crandy, many of which are owned by or supported by major mobile carriers; andproviders of card readers for mobile devices and of other new point of sale and multi-channel technologies, including Square (which has also begun to offer a marketplace service to sellers), Chase Paymentech, Bank of America, AT&T (in association with Vantiv), Capital One, Shopify, iZettle, WorldPay, Payleven, Groupon, SumUp and others.PayPal also faces competition and potential competition from:money remitters such as MoneyGram, Western Union, Global Payments, Inc., Xoom and Euronet;bill payment services, including CheckFree, a subsidiary of Fiserv;services that provide online merchants the ability to offer their customers the option of paying for purchases from their bank account or paying on credit, including Western Union’s WU Pay, Dwolla, Acculynk, TeleCheck (a subsidiary of First Data), iDEAL in the Netherlands, Klarna in several European countries with announced plans to enter the U.S. market, Sofortueberweisung (which recently merged with Klarna) in Germany, PayLib in France and the MyBank pan-European initiative;issuers of stored value targeted at online payments, including NetSpend, Green Dot, PayNearMe, UKash and Qiwi in Russia;other international online payment-services providers such as AliPay, the PayU group of companies (owned by Naspers), PagSeguro and Bcash (owned by Naspers);other providers of online account-based payments, such as Skrill, ClickandBuy (owned by Deutsche Telekom), Barclays Pingit in the U.K., Kwixo in France and Paymate and Visa PayClick in Australia;payment services targeting users of social networks and online gaming, often through billing to the consumer’s mobile phone account, including PlaySpan (owned by Visa), Boku, Bango and Payfone;payment services enabling banks to offer their online banking customers the ability to send and receive payments through their bank account, including PopMoney from Fiserv, which has a collaboration agreement with Visa, and ClearXchange (a joint venture among Wells Fargo, Bank of America and JP Morgan Chase);online shopping services that provide special offers linked to a specific payment provider, such as Visa’s RightCliq, MasterCard MarketPlace, TrialPay and Tapjoy;services such as Coinbase and Bitpay that help merchants accept and manage virtual currencies such as Bitcoin; andcash.Some of these competitors have longer operating histories, significantly greater financial, technical, marketing, customer service and other resources, greater brand recognition or a larger base of customers than PayPal, and may be also be able to leverage other affiliated businesses for competitive advantage or to attempt to prohibit or prevent competition from PayPal. PayPal’s competitors may be able to innovate and respond to new or emerging technologies and changes in customer requirements faster and more effectively than PayPal. Some of these competitors may also be subject to less burdensome licensing, anti-money laundering, counter-terrorist financing and other regulatory requirements than PayPal, which is subject to additional regulations based on, among other factors, its licensure as a bank in Luxembourg. They may devote greater resources to the development, promotion and sale of products and services than PayPal, and they may offer lower prices. For example, Google previously has offered free payments processing on transactions in amounts proportionate to certain advertising spending with Google. We also expect new entrants to offer competitive products and services. In addition, some merchants provide such services to themselves. Competing services tied to established banks and other financial institutions may offer greater liquidity and engender greater consumer confidence in the safety and efficacy of their services than PayPal. In addition, in certain countries, such as Germany, Netherlands and Australia, electronic funds transfer is a leading method of payment for both online and offline transactions. In the U.K., the Payments Council has announced that mobile payments between bank accounts will be broadly available beginning in 2014. As in the U.S., established banks and other financial institutions that do not currently offer online payments could quickly and easily develop such a service.The principal competitive factors for PayPal include the following:ability to attract, retain and engage both buyers and sellers with relatively low marketing expense;ability to show that sellers will achieve incremental sales by offering PayPal;security of transactions and the ability for buyers to use PayPal without sharing their financial information with the seller;low fees and simplicity of fee structure;ability to develop services across multiple commerce channels, including mobile payments and payments at the retail point of sale;trust in PayPal’s dispute resolution and buyer and seller protection programs;customer service; andbrand recognition.With respect to our online and mobile competition, additional competitive factors include:website and mobile platform and application onboarding, ease-of-use and accessibility;system reliability;data security;ease and quality of integration into third-party mobile applications; andquality of developer tools such as our application programming interfaces and software development kits.Some of PayPal’s competitors, such as Wells Fargo, First Data, American Express, WorldPay (The Royal Bank of Scotland) and Synchrony Financial (formerly, GE Capital Retail Bank), also provide processing services to PayPal. If PayPal were to seek to expand the financial products that it offers, either alone or through a commercial alliance or an acquisition, these processing relationships could be negatively affected, or these competitors and other processors could make it more difficult for PayPal to deliver its services.Source: Page 81/82: eBay Inc. - Quarterly ReportConclusionPayPal is not a singular product or services company anymore. It is a global player, with vested payments and banking related services interest in multiple areas. From wallets, to bitcoins, to money-transfer services, to banking to issuing, to acquiring, etc. PayPal is doing all these things in one form or the other.In order for PayPal to compete in the global marketplace of financial services for payments, acquiring, issuance and processing, it needs to cement itself in its primary market as an established bank, and this is the path (in my opinion) that PayPal will most likely follow.PayPal's cost of financial management via the current banking partners it has is quite high, not to mention the banks are also privy to the deep transaction analytics of payments that are being processed through them. PayPal would like to take this away from the banks, who also are in some way, shape or form, becoming competitors.If PayPal is able to acquire a license (which would take about two years), they would position themselves much better from lower costs of processing and escrowing the transactions on behalf of their customers as well as be able to compete head-on with what PayPal has most correctly identified their true threats, i.e. the very banks PayPal is working with.Source for MSB Searches:California: California Department of Business OversightTexas: Texas Department of Banking

Caution: Long answer but worth reading…In general, flats are bought under two circumstancesUnder construction propertyReady to move-in propertyThe buying procedure is slightly different for under construction and ready to move-in property. Let me explain the procedure in a systematic way from under construction to ready to move-in.Under construction property:It's very important to verify the land document before we make a booking amount for under-construction property. Generally, booking amount ranges from 5–20%.Some unethical builders or sellers support document verification only after the booking amount paid. Kindly hold and never initiate transactions unless the documents are verified.General land verification goes as below1.RTC Extract: (Land record) RTC stands for Record of Rights, Tenancy, and Crop Information. RTC contains the details of,Survey numberLandowners detailsType of landArea of measurementWater rateSoil typeAgricultural, commercial, nonagricultural residential flood areaLand conversion detailsNature of possession of the LandLiabilitiesTenancyCrops grownExtract the RTC from Bhoomi Online service https://rtc.karnataka.gov.in/Service78/, it cost you Rs. 10/- to download an RTC extract.Please be note: It's advisable to extract few important documents directly from government server instead of depending on seller or builder. Chances that few unprofessional sellers or builders may tamper or duplicate the document. Do your own extract of important documents,An RTC looks like below image,2.Encumbrance certificate (for land): An encumbrance certificate is a certificate issued by the sub-register office of revenue department. An encumbrance certificate popularly knows as EC. An EC helps to verify,Mortgage liabilityCourt attachmentOwnershipProperty scheduleRegistration date and allotment numberMarket price and consideration priceDeed type (Acquired through sale deed, gift deed or inherited)History of registered transactions & ownershipsIf the land has been encumbered with court attachment, property has no marketing title and cannot entitle to sell.If the property has not encumbered, it has a clear marketing title to sell, buy, and build an apartment.The encumbrance certificate is usually issued in 2 forms: Form 15 or Form 16Form 15: is issued when the property has any encumbrance during the said period, Nature of encumbrance could be gift, partition, loan, lease, legality, and parties involved in dispute.Form 16: is issued when the property doesn’t have any encumbrance during the said period. Also, know as NIL ENCUMBRANCE CERTIFICATE (NEC). Having a clear marketing title to build.An encumbrance certificate looks like below image,An EC consist of 9 columns, refer the below image for the description of each columnYou can extract the EC from Kaveri Online Services https://kaverionline.karnataka.gov.in/ at the cost of Rs. 40/- per EC.3. Property Tax receipt: A property tax receipt, contain the details of,Tax payment (Amount and date of payment)Ownership detailsProperty scheduleApplication NumberWard numberKhata numberProperty tax receipt looks like below image.We can extract the property tax receipt from https://bbmptax.karnataka.gov.in/ at no cost. It's free to extract property tax. You need PID number or application number to extract tax paid receipts.4. Khata Certificate & extract: Khata is the recording of one's property in the books of the Government (here BBMP).When one registers Sale Deed in sub-register office, it is just an agreement between the seller and the buyer but when the Khata (of the property) is registered/transferred to one's name, it means the property is in the current owner's name in the government books.This also identifies the person/persons (on whose names the Khata is registered or transferred) Registered person(s) are primarily responsible for paying the tax.Khata certificate & extract contains the details of,Khata NumberOwnershipKhata transfer feeA Khata certificate & extract looks like below image,Page 1Page 2:Page 3:Khata can be extracted through Sakala online services Registration Page5. Landowner and builder agreement (if join venture): If the project is a joint venture between landowner and builder. It's important to go through the joint venture agreement to understand the responsibility of landowners and builders.The main intention of going through the joint venture agreement is to understand the feasibility & possibility of the partnership better the landowner and builder.If there is trouble in join venture, A project may halt for some duration of time till the issue get resolver among landowner and builder.A joint venture agreement must be a registered agreement.6.Building approval plan: Approval Plan from BIAPPA/BDA is necessary. Approval is provided based on the regulation of residential land, basic utilities, safety in place. Should not be an issue to construct a residential building here.7. Floor plan: Helps clearer visuals of the entire property. Buyers can use a floor plan alongside photos to understand the layout and space of the house. A clean floor plan shows the true size and potential of every roomAt the time of booking8. Agreement of SALE: It's important to execute an “agreement of sale” on or before making the booking amount to seller or builder. This is the promissory document that seller or builder is agreed to sell the property in future date, subject to terms & condition mentioned in sale agreement.Stamp duty: 0.1% of consideration value or market value, whichever is higher. Paying 0.1% stamp duty is important for loan documentation.Stamp duty can be paid in form of e-stamping or franking.At the time of project completion9. Completion Certificate: Completion certificate is issued by Municipal Corporation once the project is completed as per the approved layout plan.10. Occupancy Certificate: is also issued by Municipal Corporation after ensuring that basic amenities like Electricity Connection, Water Supply, Sewage Connection are provided as per the approved plan.At the time of Possession11. Sale Deed Registration: Once the project is complete in all respects and has received Completion and Occupancy Certificates from BBMP, the Builder shall transfer the property in your name by executing a Sale Deed that will be registered at the respective sub-register office.Sale Deed is the important document of ownership, it should be retained safe. In case, you have taken a home loan, original copy of Sale Deed may be retained by Bank till the loan repaymentTo boost the real estate sentiment in the State, the Karnataka government has announced a cut in the stamp duty rate on properties priced below Rs 20 lakh and between Rs. 21 -35 lakh.The announcement was made on 27th May 2020 during the COVID 19 pandemics.The rate cut is focusing on affordable housing. Rate remains same as before for premium housing that is valued more than Rs. 35 Lakh.The below table describes the latest stamp duty and registration charges,0.5% cess charge applicable across all the segments of affordable and premium housing.The stamp duty & registration charge calculation goes as belowExample 1: The purchase price is Rs. 20 Lakh,Stamp duty : 20,00,000*2% = Rs.40,000/- (DD on the name of respective sub-register office)Registration charge : 20,00,000*1% = Rs.20,000/- (DD on the name of respective sub-register office)Cess : 20,00,000*0.5% = Rs.10,000/- (DD on the name of respective sub-register office)Example 2: The purchase price is Rs. 35 Lakh,Stamp duty : 35,00,000*3% = Rs. 1,05,000/- (DD on the name of respective sub-register office)Registration charge : 35,00,000*1% = Rs.35,000/- (DD on the name of respective sub-register office)Cess : 35,00,000*0.5% = Rs.17500/- (DD on the name of respective sub-register office)Example 3: The purchase price is Rs. 80 Lakh,Stamp duty : 80,00,000*5% = Rs. 4,00,000/- (DD on the name of respective sub-register office)Registration charge : 80,00,000*1% = Rs.80,000/- (DD on the name of respective sub-register office)Cess : 80,00,000*0.5% = Rs.40000/- (DD on the name of respective sub-register office)Note: 0.1% of stamp duty in sale agreement, can be offset at the time of sale deed registration. Avoid double payment.You should carry following documents at the time of sale deed registration.Sale agreementProperty tax receiptKhata certificate & extractAdhara ( Preferably link your mobile number for digital signing - Its easy & convenient at the time of registration)12. Possession Letter: Once, Sale Deed is registered in your name, the builder will give you possession letter after handing over physical possession of the property.13. Allotment letter: Builder will provide the allotment letter for parking space.Below are the few points to be considered while buying a flat in Bangalore.Avoid choosing the property next to STP, recycling plant, garbage dumping spot, graveyard, high way, railway track, and polluting industry. Stay away from pollution for cause of your health & well being.Visit the project history of builder and check the quality of constructionFlat should have natural light and decent air circulation.Avoid 100% self-financing. Prefer bank loan, loan helps to control your cash flow. Bank supports for document verification besides offering loans.Avoid verbal agreement and verbal promises from seller. Keep all the possible terms & conditions in sale agreement till the sale deed executionAs you know real-estate market is not fixed. we need strong negotiation skills to bring down the price.Keep the booking amount as low as possible. Release rest of the amount only after you get confident about project progress. Avoid complete settlement in advance. Make the payment in installment as the project progress.Under-construction properties are paid based on the progress of the project. like on-booking. 10%, Basement 10%, 1st floor, 10%, 5th floor 10%, plastering, finishing and registration. Release the fund slowly as the project progress.Keep the record of payment. Avoid cash. Make payment through online, cheque or DDFranking of sale agreement is mandatory to opt for bank loan.Franking your agreement gives you better legal stand in case fail in delivery of possession, deal cancellation, delay possession by seller.If the agreement is signed by GPA holder, collect the registered GPA from seller for cross verification.Keep the eye on penalty clause in sale agreement. if delay in payment. Most seller demand at-least 18%.What is sale agreement says, if builder delay in delivering the possession.What is in sale agreement, if buyer cancels the deal? Most seller deducts at least Rs. 1.5 Lakh or 10% of booking amount as liquidated damage. The Balance amount will be initiated only after the schedule property sold to other prospective buyer. Refund process is time-consuming and losing bank interest for buyer. (Try to modify this clause on your favor)16.Most seller allows the property registration only after the complete payment that includes consideration price + parking charge + administrative charge if applicable + corpus fund if applicable + 3 years maintenance cost in advance + Utility implementation charges if applicable ( electric meter + bore-well +STP + water recycling + water softener etc..17. Most seller provides only bore well water facility. At later stage, if owners association decided to access Cauvery water connection, each flat owner may suppose to contribute around Rs. 45,000/- per flat for cauvery water connectivity.18. Buyer may spend another Rs. 10,000 for property tax application, khata transfer application, name change at electricity bill19. Additional cost applicable for modification. The modification should be informed well in advance at the time of slab construction. Seller will not permit buyer to do modification on his/her own or modification should be done with permission of builder.20. Most builders monopolies the interior contractor but you can take a call with price & quality competitive vendor after the sale deed is done.21. You may not able to choose your parking space. Parking space is allotted by the builder. You should be lucky if no water or STP pipe running just above your parking space or there might be occasional water dripping from pipe. which might spoil the place and vehicle due to constant dripping. (Keep note of this point and inform the seller about your preferred parking spot at the time of paying booking amount itself)22. Avoid parking space just above the underground water tank or STP. Such parking spot are very dangerous and not authorized to allot such space for parking23.Hidden charges:Most builders charge administrative fees of at least Rs. 50,000/-. I really don’t understand why most builders charge an administrative fees of Rs. 50,000/- when the buyer itself pays for all the paperwork of stamp duty and registration charge.Most builders charge the non-refundable corpus fund of at-least Rs. 50,000/-. apart from 1st 3 years of maintenance cost in advance. Maintenance cost roughly around Rs.3.5 per sq.ft.For example, if your flat size is 1000 Sq.ft. you need to pay Rs. 1,26,000/- as 3 years maintenance cost on or before registering the property24. Be aware of your taxation. If the consideration value is more than Rs. 50 lakh. Buyer should pay TDS. TDS is 1% of considerable value. Pay TDS on time to avoid late payment fee. Most sellers are least bothered to discuss taxation part. Take interest and clear your tax on-time.25. Get the property inspected by professional before you get the possession from seller. Make sure the tiles, kitchen granite, piping, wiring, switchboards, and doors are fitted well.No seepage, no wall cracked and decently painted. Seller may not care to address the issue once after the possession letter is signed by you.We provide the service of document verificationWe provide the service “sale agreement” drafting + execution + arranging seller & buyer signature + franking + home deliveredWe provide the service of sale deed drafting + execution + home delivered.To opt for our service, please whatsapp 9 7 4 2 4 7 9 0 2 0.Thank you for reading…