A major digital payments company, PayPal is taking a significant step toward becoming a full service financial institution. The move signals a deeper push into traditional banking territory as competition intensifies across the fintech sector.
PayPal said on Monday that it has applied for approval to form PayPal Bank. If cleared, the new bank would allow the company to offer loans to small businesses and expand its financial services. “Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the U.S.,” PayPal CEO Alex Chriss said in a statement.
The application will be reviewed by the U.S. Federal Deposit Insurance Corporation along with Utah’s Department of Financial Institutions, the company said. PayPal also plans to introduce interest earning savings accounts for customers. The company already provides credit lines to consumers and has been steadily building banking style services as it competes with fintech rivals seeking to draw customers away from traditional brick and mortar banks. PayPal also owns the popular payments app Venmo.
Investors responded positively to the announcement, with PayPal shares rising 1.5% in extended trading. The move comes at a time of mixed financial performance for the company. In October, PayPal reported quarterly revenue growth of 7% compared with last year, reaching $8.42 billion, which exceeded analyst expectations. However, in 2025 the stock has fallen about 29%, while the S&P 500 index has gained nearly 16% over the same period.
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