PayPal power results from 2 factors. Terrible bank bank transfer opportunities for individuals domestically, and even more expensive ones internationally.
In many European countries nobody uses Paypal for transactions. It's either direct bank transfer (many banks offer no-fee transfers to other banks), bank-based payment system or credit cards. Yet in the US (a HUGE consumer market) those options are limited to credit cards, and check / ACH system and PayPal fills that niche just perfectly. It's changing, i.e. SunTrust recently introduced cheap on-line wire-transfers for only $3 / transfer - a big upgrade, as it used to be $25. Yet for some reason, the interbanking system in the US is still far behind what Europe has to offer (except for credit cards - there are definitely more developed here!)