Where's My Money?

I have used a Paypal account for several years to invoice and accept payment for my freelance work.  Until recently I’ve never used Paypal for other traditional banking functions.  My copyeditor asked for payment via PayPal and sent me an invoice by Paypal.  Originally, we agreed I would pay half up front and the remainder when the project was finished. 

As it turned out the copy editor gave me a date when the project would be finished but it was right in the middle of my sojourn to Montreal.  I didn’t think she should have to wait while I was away for her final payment, so I agreed to make full payment prior to heading north for holiday.

I needed to make two transfers from my credit union account to paypal.  When I entered the transfer I was notified that it would be 5-7 business days for Paypal to receive the funds.  Why?  It’s all electronic, the transaction should be completed by the end of the day the transaction was entered.  I ckecked my credit union account and the funds were transferred the day I entered the transaction.  I checked my Paypal account the next day and there were no funds deposited.

It took five full business days ( 7 calendar days including the weekend) for the money to show up in my Paypal account.  So where was my money for 7 calendar days?  I called Paypal and the explanation offered was that the money went to a Federal Reserve clearing house and it took 5 business days for the transaction to clear.  What?  Why did the Federal Reserve have my money?

It all sounds a bit fishy to me.  There’s a float here and my guess is that somebody’s making money off my money or using my money temporarily without my permission.  Does anyone have a clue?

Write a comment back if you understand and let me know where my money went for 7 calendar days.