PayPal Applies to Establish Bank — Update

By Katherine Hamilton

PayPal has applied to form a bank offering business loans and savings accounts.

The digital payments company, which owns Venmo, said Monday it had filed applications with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corp. to establish PayPal Bank.

The bank would be a Utah-chartered industrial loan company, which is a type of entity that can lend money, hold FDIC-insured deposits and be owned by a non-financial institution.

The application comes as PayPal and other payment companies are looking to find a niche in the banking industry. PayPal said the proposed bank would help make its lending to small businesses more efficient, as it would reduce its reliance on third parties.

Since 2013, PayPal has provided more than $30 billion in loans and working capital to more than 420,000 business accounts worldwide.

PayPal also plans to offer interest-bearing savings accounts to customers through its proposed bank. The bank would seek direct membership in the U.S. with card networks to complement processing and settlement activities through existing banking relationships.

Mara McNeill has been chosen to serve as PayPal Bank's president. She previously served as chief executive of Toyota Financial Savings Bank.

Payments companies, including buy now, pay later and crypto platforms, have been making moves to operate more like banks and big financial institutions.

The Minneapolis-based BNPL platform Sezzle said in November it was looking into becoming an industrial loan company because it would make the business more efficient. It said the option was less complicated than becoming a bank holding company.

Buy-now-pay-later companies Klarna and Affirm have both launched debit cards in recent years. Affirm is trying to compete more closely with credit card companies as it looks to bring in more revenue from card payments. Klarna, which operates a digital bank in Europe, has added perks to its card, following in the footsteps of credit card companies' loyalty programs.

Last week, five cryptocurrency platforms received preliminary approval to establish national trust banks. The companies, which include Ripple and Circle, were given conditional approval by the Office of the Comptroller of the Currency to set up banks, though they won't be able to take deposits, offer checking or savings accounts, or provide FDIC insurance.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

December 15, 2025 18:39 ET (23:39 GMT)