On December 15, 2025, PayPal, the global payments giant, officially applied for a U.S. banking charter as part of a strategic move to broaden its lending services, particularly for small business customers. The company submitted applications to both the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish an industrial loan company (ILC) named PayPal Bank. If granted, the charter would allow PayPal to offer federally insured deposit accounts, enabling it to directly handle customer deposits and reduce its reliance on third-party lenders—a significant shift as fintech companies increasingly seek deeper integration into traditional financial services.
This move comes as the regulatory environment has become more favorable for non-traditional banking institutions, with other digital finance firms also securing similar charters in recent years. For PayPal, obtaining a banking charter would not only provide access to additional financial products but also strengthen its competitive position in the rapidly growing small business credit market. Over the years, PayPal has built a significant presence in business financing, having provided over $30 billion in loans and capital to small businesses worldwide since 2013.
The proposed PayPal Bank would be led by Mara McNeill, a seasoned veteran in commercial lending, who is expected to guide the company’s efforts to expand its offerings. By becoming a federally insured bank, PayPal would have the ability to offer more flexible and competitive financial products to small businesses, particularly those that may have limited access to traditional banking services. This expansion into banking services would also enable PayPal to build stronger relationships with its business customers, providing them with a full suite of financial tools beyond just payments.
PayPal’s application is a clear indication of the growing trend of fintech companies seeking to evolve into full-fledged financial institutions, blurring the lines between traditional banking and digital finance. With this move, PayPal aims to capitalize on the increasing demand for alternative credit solutions, particularly from small businesses that have struggled to access capital through conventional means. As the fintech sector continues to disrupt the banking industry, PayPal’s bid for a banking charter represents a key moment in the broader shift toward more integrated and accessible financial services.