PayPal Holdings Inc (NASDAQ:PYPL, XETRA:2PP) announced that it has filed applications with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish a Utah-chartered industrial loan company, potentially creating PayPal Bank.
The move represents a shift from PayPal’s traditional payments focus toward offering more comprehensive banking services, including small-business lending and interest-bearing deposit accounts.
If approved, PayPal Bank would operate as a regulated financial institution, with deposits eligible for FDIC insurance.
Since 2013, PayPal has provided more than $30 billion in loans and working capital to over 420,000 business accounts worldwide.
The company said a bank charter would allow it to deliver lending solutions more efficiently, reduce reliance on third-party lenders, and strengthen its financial services ecosystem.
PayPal also plans for the bank to offer interest-bearing savings accounts and pursue direct membership in US card networks, complementing its existing processing and settlement activities.
"Securing capital remains a significant hurdle for small businesses striving to grow and scale," PayPal CEO Alex Chriss said in a statement. "Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the US."
Mara McNeill, formerly President and CEO of Toyota Financial Savings Bank, has been named president of PayPal Bank.
Shares of PayPal added 1.5% on the news at about $62.