- PayPal Bank could be the company’s next move in the US, subject to approvals
- SMB loans and interest-bearing savings accounts are in the pipeline
- Former Toyota CFO appointed president of the bank
PayPal has started the formal process to open “PayPal Bank,” which it hopes will improve small business lending in the United States and reduce reliance on third-party banks.
In a press release, the company confirmed that it had “submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation.”
To support its case, PayPal highlighted that since 2013 it has provided over $30 billion in loans and working capital to more than 420,000 business accounts worldwide, so a PayPal bank would be a good fit.
PayPal Bank may be next, subject to approvals
“Securing capital remains a significant hurdle for small businesses striving to grow and scale,” said CEO Alex Chriss. The company hopes that a self-branded bank will strengthen its business, improve efficiency and open up new economic opportunities across the United States.
The bank is also expected to offer interest-bearing savings accounts to customers and to seek direct membership with US card networks “to complement processing and settlement activities through existing banking relationships.”
Former Toyota Financial Savings Bank CEO Mara McNeill has been named president of PayPal Bank.
The filing will be subject to regulatory approval, but investors appear to be pleased, with shares rising about 1.5% in extended trading following the announcement.
This is not the only news that PayPal has announced about an expansion of their payment network. Recently in the UK, the company stated that it would bring credit cards, debit cards and loyalty points to UK customers.
At the time, Consumer Group General Manager Diego Scotti stated that the company had responded to customer feedback to launch the new products.
“We have returned the business to growth and are on track for 6% to 7% growth in dollar transaction margin in 2025, when we exclude interest on customer balances,” said Chriss, speaking on the company’s latest quarterly earnings. “This is a stronger company today than we were two years ago.”
PayPal also plans to adopt agent AI more broadly, partnering with companies like Google, OpenAI and Perplexity.
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