PayPal has officially announced that it had submitted an application to form PayPal Bank to the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions (UDFI). As per the official press release, this move will strengthen the company’s business while also providing better support for small businesses across the US.
The fintech company reasons that it has provided “over [US]$30 billion in loans and working capital” for more than 420,000 business accounts globally since 2013. With a focus on SMEs, the company argues that it is “filling a critical gap” that allows for small businesses to help expand and thrive. The establishment of the bank will improve the company’s efficiency, which will result in better support for said SMEs, according to Alex Chriss, president and CEO of PayPal.
In the same document, the company also plans to offer interest-bearing savings accounts to its customers. If approved, it would be chartered in Utah. PayPal Bank also plans to seek direct membership in U.S. card networks to complement its processing and settlement activities through existing banking relationships.
At the time of writing, both the US FDIC and the UDFI are currently reviewing the company’s application for PayPal Bank. It’s also worth noting that PayPal isn’t the only company applying to be a bank. Engadget reported that a few cryptocurrency companies, namely BitGo, Circle and Ripple, received conditional approval to become federally chartered trust banks last Friday.
