PayPal Holdings, Inc. has submitted applications to U.S. regulators to establish its own bank in order to improve access to financial services for small businesses across the United States.
The company said it has applied to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to set up PayPal Bank, a Utah-chartered industrial loan company.
If approved, the move would allow PayPal to offer business loans and other financial products more directly, without relying heavily on third-party banks.
PayPal has been active in small business financing for more than a decade. Since 2013, it has provided over US$30 billion in loans and working capital to more than 420,000 business accounts worldwide. These funds have helped small businesses grow, purchase inventory, and invest in staff and technology.
According to PayPal, establishing its own bank would make its lending operations more efficient and strengthen its overall business. The company said many small businesses still struggle to secure capital especially through traditional banking channels.
Beyond lending, PayPal Bank is expected to offer interest-bearing savings accounts to customers. It also plans to apply for direct membership with U.S. card networks which would support its payment processing and settlement activities alongside existing banking partners.
If the application is approved, customer deposits held at PayPal Bank would be eligible for FDIC insurance giving added protection for users.
PayPal cautioned that the plan is subject to regulatory approval and may not proceed as expected. The company noted that future outcomes could differ due to regulatory, operational, or market-related risks.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
