No matter how great a programmer you are, you know that banks are probably going to say no to something like PayPal (at least back in the mid-nineties).
So, this question has been nagging me for a while. How did he get them to accept payment transfers in and out of PayPal?
PayPal started as Confinity with Levchin/Thiel/Nosek/Howery and had its own set of finance industry investors. Thiel was from finance himself, so he's probably the source of their early connections.
It wasn't until 2 years after PayPal was founded that it was acquired by Musk's X.com, and the merged company kept the PayPal brand. Immediately after the acquisition, they raised another $100 million with investors including Deutsche Bank, Vertex and Development Bank of Singapore and JP Morgan.
I don't share the same assumption that banks would be especially hesitant to process transactions for a well-funded tech company in 1999, though. I think the fact that they were investing in these companies readily is evidence otherwise. I'm not sure I can ignore what I know today to say whether it was obvious or not 15 years ago that if person-to-person online payments got popular, they'd become a significant target for international payment fraud.