PayPal Holdings (PYPL) has announced that it has applied to establish its first physical US Bank. The PayPal Bank would be a Utah-chartered industrial loan company, and the platform submitted the required documents to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation on Monday.
If approved, the proposed PayPal bank would focus on providing business lending solutions to small businesses in the United States. PayPal currently sits on a market capitalization of approximately $57 billion, but the bank establishment would provide a big boost to its cap and business offerings.
“Securing capital remains a significant hurdle for small businesses striving to grow and scale,” said Alex Chriss, President and Chief Executive Officer, 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 their Monday statement, PayPal Holdings says it also plans to offer interest-bearing savings accounts to customers. The bank would also seek direct membership in the U.S. with card networks to complement processing and settlement activities through existing banking relationships. Furthermore, if the PayPal Bank is approved, customer deposits at the bank will be eligible for FDIC insurance coverage.
In another move to prep for the Bank’s potential launch, the payment company has appointed Mara McNeill to serve as the bank’s President, with over 25 years of financial services experience in banking, commercial lending, and private equity. PYPL stock climbed just under 1% post-market trading following the announcement.