PayPal Holdings, Inc., the global digital payments giant, has formally filed applications for a U.S. banking license as part of a broader strategic push to deepen its financial services offerings — particularly small business lending and deposit services. The company’s filings mark a significant step toward establishing a regulated banking arm in the country. Financial Times
PayPal submitted its applications to the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions to form a Utah-chartered industrial loan company that would operate under the proposed name PayPal Bank.
📑 Why This Move Matters
📌 Expansion of Lending and Banking Services
While PayPal has long offered credit and business financing through partner banks, the banking license would allow it to directly originate loans, including small business loans and interest-earning savings accounts, reducing its reliance on third parties.
- Since 2013, the company has provided over $30 billion in loans and working capital to more than 420,000 business accounts worldwide. Under the new charter, it expects to strengthen and streamline capital access for U.S. small businesses
- PayPal also plans to introduce interest-bearing savings accounts for customers — a key banking service not offered under its current structure
📌 Regulatory and Strategic Context
PayPal’s application comes amid a regulatory shift in the U.S. financial sector, with the current administration appearing more open to fintech firms and similar non-traditional players entering the banking system. A string of digital asset and fintech companies — including Ripple and Circle — have recently sought or received banking charters.
If approved, PayPal Bank would begin accepting FDIC-insured deposits, making PayPal’s financial services more secure and attractive for users wary of uninsured holding accounts.
🧠 Leadership and Future Plans
PayPal has selected Mara McNeill, a seasoned banking executive and former CEO of Toyota Financial Savings Bank, to lead the proposed PayPal Bank. Her appointment underscores the company’s commitment to building a regulated banking institution with strong leadership.
📊 Potential Impact
🚀 Stronger Financial Footprint
A dedicated bank charter could transform PayPal from a payments platform into a full-service financial institution, capable of competing with traditional banks and digital challengers alike. It would allow PayPal to:
- Offer broader credit products to both consumers and businesses
- Provide interest-bearing deposit accounts with FDIC protection
- Gain direct access to U.S. payment networks and banking infrastructure
💼 Benefits for Small Businesses
PayPal has emphasized its goal of making capital access easier for small businesses, a segment that often faces lending hurdles from traditional banks. By cutting out intermediaries, it hopes to deliver faster and more flexible financing solutions.
🧩 Next Steps
The banking license application is now under review by U.S. regulators, including the FDIC and Utah authorities. Approval is not guaranteed — the process typically involves rigorous checks of capital plans, risk controls and governance frameworks. If successful, PayPal Bank would represent one of the highest-profile shifts of a fintech into the regulated banking sector in recent years.
