Why Is PayPal Stock Up Today? Company Applies to Launch PayPal Bank

PayPal Holdings, Inc. (PYPL) is trading higher in pre-market hours on Tuesday, December 16, 2025, building on momentum from the previous session after the digital payments company announced it has applied for regulatory approval to form PayPal Bank. The stock gained 1.47% in pre-market trading to $61.63 as of 9:06 AM EST, following a 1.5% rise in after-hours trading on Monday when the news broke.

The banking charter application represents a pivotal expansion of PayPal’s business model, allowing it to directly offer small business loans and federally insured savings accounts to customers. PayPal has submitted applications to both Utah’s Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish a Utah-chartered industrial loan company, positioning itself to compete more directly with traditional banks and emerging fintech rivals.

PayPal Seeks Bank Charter to Expand Small-Business Lending

PayPal’s application to form PayPal Bank aims to strengthen the company’s position in small business lending while reducing reliance on third-party partners. CEO Alex Chriss stated that establishing the bank will improve efficiency and enable better support for small business growth across the United States.

The company has already provided $30 billion in loans to more than 420,000 businesses worldwide since 2013, demonstrating its existing commitment to this market segment.

If approved, PayPal Bank would offer interest-bearing savings accounts to customers, addressing a longstanding concern among users who have been hesitant to store large amounts of money on platforms like PayPal and Venmo due to the lack of federal insurance coverage.

The banking charter would make customer deposits eligible for FDIC insurance protection, potentially increasing consumer confidence and deposits on the platform. PayPal has named Mara McNeill, previously CEO of Toyota Financial Savings Bank, as the first president of the proposed bank.

PYPL Shares Edge Higher as Investors Weigh Banking Expansion

PayPal stock closed at $60.74 on December 15, 2025, down 0.92 (-1.49%) during regular trading hours. However, in pre-market trading on December 16, the stock rebounded to $61.63, up $0.89 (+1.47%) at 9:06 AM EST, reflecting positive investor reaction to the banking charter news.

Despite this uptick, PayPal has faced significant headwinds in 2025, with the stock down approximately 29% year-to-date, contrasting sharply with the S&P 500’s gain of nearly 16% over the same period.

The company’s most recent quarterly results showed some strength, with Q3 FY2025 revenue reaching $8.42 billion, representing a 7% year-over-year increase that exceeded analyst expectations. PayPal currently trades at a market capitalization of $58.03 billion with a trailing P/E ratio of 12.20 and a forward P/E of 10.45.

Analysts maintain an average price target of $79.45 for the stock, suggesting potential upside from current levels. The banking charter application aligns with PayPal’s broader strategy to compete more effectively with traditional financial institutions and emerging fintech competitors in an increasingly crowded digital payments landscape.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.