PayPal Applies to Establish Bank Targeting US Retail and Small Business Lending

PayPal has applied for approval to establish PayPal Bank, which would be able to offer loans to small businesses.

Other fintechs are also exploring banking licences. Wise is considering a banking licence in the United Kingdom and has engaged senior financial sector figures about roles linked to a potential banking business. The company has also applied to the U.S. Office of the Comptroller of the Currency to establish a national trust bank in Texas, allowing direct U.S. dollar settlements with the Federal Reserve.

Meanwhile, UK regulators are holding Revolut’s full banking licence over concerns about risk controls amid the fintech’s international expansion. Revolut has operated under a restricted “mobilisation” licence since last year, and authorities are reviewing its risk management before deciding on a full licence.

PayPal Seeks Bank Licence for Lending

“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.,” CEO Alex Chriss said in a statement.

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The company said the U.S. Federal Deposit Insurance Corporation will review the application, along with Utah’s Department of Financial Institutions. PayPal also plans to offer interest-bearing savings accounts to its customers.

PayPal $PYPL has applied with the FDIC and Utah regulators to form “PayPal Bank,” a Utah industrial loan company aimed at expanding its small business lending after already providing more than $30B in loans since 2013. pic.twitter.com/rZ0XRLAZ9L

— Wall St Engine (@wallstengine) December 15, 2025

PayPal already provides credit lines to consumers and has been expanding banking-like services amid growing competition from fintech firms seeking to attract business from traditional banks.

Shares Rise After Bank Announcement

Shares of PayPal rose 1.5% in extended trading following the announcement. In October, the company reported quarterly revenue of $8.42 billion, up 7% from a year earlier, surpassing analysts’ expectations. In 2025, however, the stock has fallen about 29%, while the S&P 500 has gained nearly 16% over the same period.