PayPal Applies to Establish Bank in US... Fintech Firms Enter Banking Sector

Reuters Yonhap News

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PayPal, the online payment service provider, is entering the banking sector.

According to Bloomberg on the 16th (local time), PayPal announced that it has submitted an application to establish a bank in the form of an Industrial Loan Company (ILC) to the Utah Department of Financial Institutions (DFI) and the Federal Deposit Insurance Corporation (FDIC).

Through the establishment of a bank, PayPal plans to strengthen its lending to small and medium-sized businesses. Since 2013, PayPal has provided more than 30 billion dollars in loans and capital to small businesses. If it obtains a banking license, the company will be able to manage funding and lending more efficiently.

Chief Executive Officer Alex Chriss stated, "Access to capital remains a significant barrier for small businesses seeking growth," adding, "By establishing PayPal Bank, we will enhance our business and efficiency, and support growth and economic opportunities for small businesses across the United States."

This move is interpreted as a result of the Trump administration's regulatory easing. The Trump administration has created an environment that allows fintech and virtual asset companies to enter the banking sector. Previously, major virtual asset companies such as Circle, Ripple, and Paxos received preliminary regulatory approval for bank establishment.

PayPal has already obtained a banking license in Luxembourg. If it receives approval to operate as a bank in the United States, it is expected to expand its retail business, including deposit accounts.

If the bank establishment is approved, it will launch as "PayPal Bank," with Mara McNeill serving as the first bank president. Mara McNeill previously served as CEO of Toyota Motor's financial subsidiary.

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