The application comes on the heels of a number of cryptocurrency firms gaining preliminary regulatory approval to become banks last week
[NEW YORK] PayPal Holdings applied to become a bank in the US, looking to take advantage of the Trump administration’s openness to financial-technology companies entering the banking system.
The payments-focused firm submitted applications to the Federal Deposit Insurance Corporation and the Utah Department of Financial Institutions to form a Utah-chartered industrial loan company, PayPal said in a statement on Monday (Dec 15).
If approved, PayPal Bank would help the firm bolster its small-business lending capabilities, according to the statement, which said the company has provided access to more than US$30 billion in loans and capital since 2013.
“Securing capital remains a significant hurdle for small businesses striving to grow and scale,” PayPal chief executive officer Alex Chriss said in the 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.”
The application comes on the heels of a number of cryptocurrency firms gaining preliminary regulatory approval to become banks last week, including Circle Internet Group, Ripple and Paxos. Since US President Donald Trump took office in January, interest in becoming a bank has jumped compared to the Biden administration’s term, when very few applications were submitted let alone considered, based on an understanding that approval would be challenging.
That’s now changed. Beyond the now-approved crypto firms, Nissan Motor’s financing arm earlier this year applied for the same charter that PayPal is pursuing, and Japan’s Sony Group has also applied to be a bank.
PayPal, which already has a banking license in Luxembourg, said it’s also interested in offering customers interest-bearing savings accounts as the firm builds out and improves its consumer-focused finance products.
If approved, PayPal Bank’s president will be Mara McNeill, who previously served as CEO of the financing arm of Toyota Motor. BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
