PayPal Applies for Utah Bank License to Expand Small Business Lending

PayPal has applied to US regulators to establish an industrial bank in Utah as part of a move to more efficiently provide lending services to small businesses in the US.

The payments giant has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish PayPal Bank, a proposed Utah-chartered industrial loan company.

If approved, the bank would allow PayPal to provide business lending solutions more directly and efficiently to small businesses in the US, while reducing its reliance on third-party banking partners.

Alex Chriss, president and CEO of PayPal, said:  "Securing capital remains a significant hurdle for small businesses striving to grow and scale,

"Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the US."

PayPal said the proposed bank would initially focus on supporting small business customers. Over time, PayPal Bank is also expected to offer interest-bearing savings accounts, expanding the range of traditional banking products available within its ecosystem.

As part of the proposal, PayPal Bank would seek direct membership with US card networks. This would complement PayPal’s existing processing and settlement activities, which currently rely on established banking relationships, and could provide greater efficiency and control over payment flows.

If the application is approved, customer deposits held at PayPal Bank would be eligible for FDIC insurance, providing the same protections as deposits at other insured US banks.

PayPal has selected Mara McNeill to serve as president of the proposed bank. McNeill has more than 25 years of experience in financial services, including banking, commercial lending, and private equity. Before joining PayPal, she was president and chief executive of Toyota Financial Savings Bank.