PayPal now wants to become a bank in the US. The company has submitted the required applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to establish PayPal Bank, which would be a Utah-based chartered industrial loan company.
PayPal says this would strengthen its business and improve its efficiency, enabling it to “better support small business growth and economic opportunities across the US”. Aside from providing small business loans, PayPal Bank would offer interest-bearing savings accounts to customers, and it would also become a member of card networks in the US “to complement processing and settlement activities through existing banking relationships”.
Since 2013, PayPal says it has “provided access to over $30 billion in loans and working capital to more than 420,000 business accounts worldwide”, and this proposed bank would allow it to “provide business lending solutions more efficiently to small businesses in the US, while reducing reliance on third parties and strengthening PayPal’s business”.
If the authorities approve the establishment of PayPal Bank, customer deposits would be eligible for FDIC insurance coverage.
