PayPal Holdings (PYPL) announced that it has filed to form the first physical bank in the United States. PayPal Bank will become a Utah-chartered industrial lending company, and the platform filed the necessary paperwork with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation on Monday.
If approved, the proposed PayPal bank would focus on providing business financing solutions to small and medium-sized businesses in the United States. PayPal’s market capitalization currently stands at about $57 billion, but establishing a bank would significantly strengthen its cap and business.
“Accessing capital remains a major hurdle for small and medium-sized businesses looking to grow and scale,” said Alex Criss, president and CEO of PayPal. “The creation of PayPal Bank will strengthen our business, increase efficiency, and enable us to better support the growth and economic opportunity of small businesses across the United States.”
among them Monday’s statementPayPal Holdings also plans to offer interest-bearing savings accounts to customers. The bank also plans to explore direct affiliations with card networks in the United States to complement processing and payment activities through existing banking relationships. Additionally, once PayPal Bank is approved, customer deposits with the bank will be FDIC insured.
In another move in preparation for the bank’s potential launch, the payments company has named Mara McNeil, who has more than 25 years of financial services experience in banking, commercial lending and private equity, as bank president. PYPL stock rose less than 1% in post-market trading following the announcement.
