PayPal applies for banking licence
Published:Friday | January 2, 2026 | 12:07 AM
US-based PayPal Holdings, Inc has formally applied to set up PayPal Bank, submitting applications to both the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC), the company stated in a release.
The move represents a step in PayPal’s evolution from payments platform to full service financial provider.
“Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the USA,” said Alex Chriss, president and CEO of PayPal in a release. “Securing capital remains a significant hurdle for small businesses striving to grow and scale.”
Since 2013, PayPal has extended more than US$30 billion in loans and working capital to over 420,000 business accounts worldwide, filling a gap for small enterprises seeking capital to expand, buy inventory, or invest in staff and technology.
As proposed, PayPal Bank would allow the company to deliver lending solutions more efficiently to small businesses in the United States, reducing reliance on third-party institutions and strengthening PayPal’s own business model.
In addition to small business lending, PayPal Bank expects to offer interest-bearing savings accounts to customers. The bank would also seek direct membership with US card networks to complement processing and settlement activities currently handled through partner banks.
If approved, customer deposits at PayPal Bank would be eligible for FDIC insurance coverage. PayPal has appointed Mara McNeill as president of the proposed bank. McNeill brings more than 25 years of experience in banking, commercial lending, and private equity, having previously served as president and CEO of Toyota Financial Savings Bank, the company stated.
The application underscores PayPal’s ambition to deepen its role in financial services. By creating its own chartered bank, PayPal aims to reduce costs, streamline lending operations, and expand its reach among small businesses — a segment often underserved by traditional banks.
Analysts note that the move could position PayPal to compete more directly with fintech rivals and challenger banks, while also diversifying its revenue base beyond transaction fees.
PayPal cautioned that the application remains subject to regulatory approval. In its filing, the company highlighted risks and uncertainties, noting that approval may not be obtained and that benefits may differ from expectations.
Founded more than 25 years ago, PayPal has become a global commerce platform, operating in approximately 200 markets. Its services empower consumers and businesses to move money, sell, and shop securely, with offerings ranging from payments to credit and working capital solutions.