PayPal Moves Toward Banking With Application to Launch PayPal Bank
PayPal Submits Applications to Establish PayPal Bank
PayPal has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to establish a Utah-chartered industrial loan company, proposed as PayPal Bank.
The move builds on PayPal’s long-running small business lending operations, through which it has provided more than $30 billion in loans and working capital to over 420,000 business accounts globally since 2013. By operating through an owned, regulated bank, PayPal aims to deliver lending and related financial services to U.S. small businesses more directly, while reducing reliance on third-party banking partners and integrating these activities more closely with its payments infrastructure.
Key Elements of the Industrial Bank Application
Industrial Loan Company Structure: The application seeks approval for an industrial loan company model, allowing PayPal to own and operate a bank under state regulation and FDIC supervision, without becoming a full bank holding company.
Small Business Lending Focus: PayPal Bank would support U.S. small business lending products, formalizing and scaling existing loan and working capital programs through a regulated banking entity.
Deposit and Savings Products: The proposed bank plans to offer interest-bearing savings accounts. If approved, customer deposits would qualify for FDIC insurance coverage.
Direct Card Network Access: PayPal Bank would seek direct membership with U.S. card networks to support processing and settlement activities, complementing existing banking relationships rather than replacing them.
FinTech Firms Pursuing U.S. Banking and Trust Charters
Circle: Circle has received conditional OCC approval to establish a national trust bank to manage reserves backing its U.S. dollar stablecoin under federal oversight.
Ripple: Ripple has secured conditional approval to form a national trust bank, placing its stablecoin reserve management under both federal and state regulatory supervision.
Coinbase: Coinbase has applied to become a national trust company to expand its custody business and support payments and related services under federal regulation.
Stripe: Stripe has applied for a limited-purpose merchant acquirer bank charter in Georgia to gain direct card network access, without offering deposits or traditional banking services.
Wise: Wise has filed an application with the OCC to create a national trust bank, aimed at reducing dependence on partner banks and supporting service expansion in the U.S.
Nubank: Nubank has applied for a U.S. national bank charter as part of plans to explore broader market participation, including deposits, credit, and custody services.
Revolut: Revolut has confirmed it is evaluating options to establish a U.S. bank, either through acquisition or by applying for a new banking license.
From an industry perspective, PayPal’s industrial bank application aligns with a broader shift among fintech firms toward regulated banking and trust structures in the U.S., driven by the need for greater control over core financial services, reduced dependency on intermediaries, and closer alignment with regulatory frameworks.
