PayPal applies for US banking licence

As a Utah-chartered industrial loan company, PayPal Bank would extend the company’s business lending suite, while reducing reliance on third party banks.

The company has already extended $30 billion in loans and working capital to small businesses, but this move would let it knock third parties out of some arrangements.

“Securing capital remains a significant hurdle for small businesses striving to grow and scale,” says Alex Chriss, president and CEO, PayPal. “Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the U.S.”

In addition to small business lending, PayPal Bank expects to offer interest-bearing savings accounts to customers. The new entity would also seek direct membership in the US with card networks to complement processing and settlement activities through existing banking relationships.

If approved, customer deposits at PayPal Bank would be eligible for FDIC insurance coverage.

Mara McNeill, the former president and CEO of Toyota Financial Savings Bank, has been selected to serve as PayPal Bank’s president.