PayPal applies to set up Utah-chartered bank to expand US lending, savings offerings

PayPal Holdings Inc said on Tuesday it has applied to US regulators to set up a bank in Utah, a move that would allow the digital payments firm to expand its lending and deposit-taking capabilities and reduce its dependence on third-party banking partners.

The company has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to establish PayPal Bank, a proposed Utah-chartered industrial loan company. If approved, the new entity would enable PayPal to offer business loans more directly to small enterprises in the US.

PayPal has been active in small business financing for over a decade. Since 2013, it has provided more than $30 billion in loans and working capital to over 420,000 business accounts globally, targeting merchants that often struggle to access traditional bank credit. The proposed bank structure is expected to improve operational efficiency in this lending business.

In addition to business loans, PayPal Bank plans to offer interest-bearing savings accounts. Customer deposits would be eligible for coverage under the US Federal Deposit Insurance Corporation, subject to regulatory approval.

The proposed bank would also seek direct membership with US card networks, a step aimed at supporting its payments processing and settlement operations alongside its existing banking relationships.

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