PayPal is shutting down its Money Market Fund, notifying participants that the fund will be closing as of July 29 of this year.
PayPal users could previously put the money they earned from PayPal transactions in a Money Market Fund to accrue interest. PayPal customers could choose have their free cash balances swept into the Fund in order to earn income until the cash is used. Shares of the Fund will could be redeemed to pay for transactions such as payments, purchases and other electronic money transfers from PayPal customer accounts.
As of last week, the fund held $471 million and had returned 0.04% to investors so far this year, reports SmartMoney. A PayPal rep told SmartMoney, that “market conditions, financial advantages of the money market fund have diminished” for its merchants.
Here’s the message sent to the fund’s participants:
Hello [ ],
Thanks for using PayPal and the PayPal Money Market Fund. Unfortunately, we’ve decided to close the Money Market Fund, effective 7/29/11.
What does this mean for you? PayPal will transfer any undisbursed dividends you’ve earned into your PayPal account within 7 business days after we close the fund. Don’t worry; you don’t have to do a thing.
Your 2011 tax documents will continue to be available on the Fund Summary page in your PayPal account throughout 2012. You’ll receive a tax statement from PayPal only if you’ve earned $10 or more in dividends in 2011.
PayPal is an online payments and money transfer service that allows you to send money via email, phone, text message or Skype. They offer products to both individuals and businesses alike, including online vendors, auction sites and corporate users. PayPal connects effortlessly to bank accounts and credit cards. PayPal Mobile is one of PayPal’s newest products. It allows you to send payments by text message or by using PayPal’s mobile browser. PayPal created the Gausebeck-Levchin test, which is an implementation...