PayPal has begun the official process to create “PayPal Bank,” aiming to better support small businesses in the US by reducing reliance on third-party banks.
The company announced it has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) for approval.
Since 2013, PayPal has provided over $30 billion in loans and working capital to more than 420,000 business accounts worldwide. A PayPal Bank would build on this experience to offer more direct financial services.
CEO Alex Chriss said, “Securing capital remains a significant hurdle for small businesses striving to grow and scale.” PayPal believes having its own bank would strengthen its business, improve efficiency, and create new economic opportunities across the country.
PayPal Bank plans to offer interest bearing savings accounts and aims to become a direct member of US card networks to enhance payment processing and settlement alongside existing banking partnerships.
Mara McNeill, former CEO of Toyota Financial Savings Bank, has been appointed as the President of PayPal Bank.
The bank’s launch depends on regulatory approval, but investors reacted positively, with PayPal’s shares rising about 1.5% in after hours trading following the announcement.
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