PayPal wants to be more than just a payment app in the United States. On Monday, the company announced it had officially applied to launch “PayPal Bank.” They sent the necessary paperwork to the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions. If regulators give them the green light, the new bank will operate in Utah.
While this is a big step in the US, PayPal isn’t new to banking. The company already holds a banking license in Europe and has its headquarters in Luxembourg. For its US plans, however, the company is putting small businesses front and center. PayPal says it has already provided over $30 billion in loans and working capital to more than 420,000 business accounts worldwide.
Alex Chriss, PayPal’s president and CEO, explained that this move is intended to solve a specific problem. He noted that gaining access to capital remains a major challenge for small businesses seeking to expand. By becoming a chartered bank, PayPal can fund these loans directly rather than relying on partners. Chriss stated that owning a bank charter will strengthen their business and allow them to offer better support to merchants across the country. Beyond loans, the company also plans to offer interest-bearing savings accounts to its customers.
The timing of the application lines up with a busy season for banking regulators. Under the Trump administration, officials have shown a greater willingness to allow tech and corporate giants into the banking system. Just last Friday, the Office of the Comptroller of the Currency (OCC) gave conditional approval to five cryptocurrency firms, including BitGo, Circle, and Ripple, to operate as trust banks. Major corporations like Sony and Nissan have also submitted their own applications recently.
Regulators welcome the competition. Jonathan V. Gould from the OCC mentioned that new entrants are good for the economy because they give consumers more choices and push the industry to be more competitive. Now, PayPal is waiting to see if it can officially join the club.
