PayPal Holdings Inc. has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corp. to establish PayPal Bank, a proposed Utah-chartered industrial loan company.
PayPal Holdings is headquartered in San Jose, California.
PayPal said that since 2013, it has provided access to over $30 billion in loans and working capital to more than 420,000 business accounts worldwide, filling a gap for small businesses seeking capital to expand, buy inventory or invest in the people and tools needed to grow. As proposed, PayPal Bank would enable PayPal to provide business lending solutions more efficiently to small businesses in the U.S., while reducing reliance on third parties and strengthening PayPal’s business, the company said in its announcement.
“Securing capital remains a significant hurdle for small businesses striving to grow and scale,” said Alex Chriss, president and CEO of PayPal. “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.”
In addition to providing small-business loans, PayPal Bank expects to offer interest-bearing savings accounts to customers. If the bank is approved, customer deposits at PayPal Bank would be eligible for FDIC insurance coverage.
Mara McNeill has been selected to serve as PayPal Bank’s president, with over 25 years of financial services experience in banking, commercial lending and private equity. Before joining PayPal, she served as president and CEO of Toyota Financial Savings Bank.
PayPal is best known as a global online payment system and digital wallet that lets individuals and businesses send, receive and manage money over the Internet, acting as a middleman to protect financial details from sellers. Users link their bank accounts, debit and credit cards or PayPal balance to make payments for online shopping, bills and transfers to friends, with options to pay later or earn rewards.