US fintech giant PayPal has applied to establish a Utah-chartered industrial bank as it aims to expand its presence in the US small business lending market.
The company, which claims to have provided access to over $30 billion in loans and working capital to global businesses since 2013, has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to create its new entity, PayPal Bank.
The move follows a similar application earlier this year by Japanese automotive heavyweight Nissan to form Nissan Bank under the same Utah-based regulatory framework.
If approved, PayPal says that its new banking entity will enable it to provide lending solutions “more efficiently to small businesses in the US, while reducing reliance on third parties and strengthening PayPal’s business”.
In addition to lending, PayPal Bank also plans to offer interest-bearing savings accounts and is seeking direct membership with US card networks. Customer deposits at the proposed bank will be protected by FDIC insurance coverage.
Alex Chriss, PayPal’s president and CEO, states that the establishment of PayPal Bank will “strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the US”.
Mara McNeill, former president and CEO of Toyota Financial Savings Bank, has been appointed to lead PayPal Bank as president. McNeill brings 30 years of experience in financial services, including six years at JP Morgan Chase, two years as senior counsel at the US Treasury Department, and prior service in the US Air Force.
This development comes hot on the heels of PayPal offloading around $7 billion of receivables from its buy now, pay later business in the US to funds managed by Blue Owl Capital.
Source: https://www.fintechfutures.com/
