I don't know if that Paypal story is true, but that definitely is the situation with Intuit/TurboTax in America.

> How do Americans transfer money? Don't your banking apps allow that?

If the exchange isn't online and is a fairly large amount of money, something like buying a car, checks (cheques) or even envelopes of cash are a lot more common than PayPal. Online, those aren't easy so that's where Paypal and their competitors shine. Americans also now use other apps for small money exchanges, like paying somebody for mowing your lawn, although refusing the app and offering/demanding cash is still relatively normal.