PayPal Holdings Inc. formally submitted applications on December 15, 2025, to establish PayPal Bank, a Utah-chartered industrial loan company, marking a major step toward becoming a regulated banking institution in the U.S.
The move would allow PayPal to expand beyond payments and take greater control over lending, savings, and financial infrastructure.
Direct Lending and Savings Accounts
If approved, PayPal Bank would enable the company to lend directly to U.S. small businesses, reducing its dependence on third-party banking partners. This would be a structural shift from PayPal’s current model, which relies on partner banks to fund and service loans.
PayPal also plans to introduce interest-bearing savings accounts for consumers for the first time, expanding its product offering beyond wallets and payments.
FDIC Insurance and Infrastructure Control
Alongside the bank charter application, PayPal filed with the Federal Deposit Insurance Corporation (FDIC) to ensure that customer deposits would qualify for federal deposit insurance.
Becoming a bank would also allow PayPal to pursue direct membership in U.S. card networks, strengthening its control over processing, settlement, and payments infrastructure. This would complement PayPal’s existing role as a major payments processor while reducing reliance on intermediary institutions.
Leadership and Regulatory Backdrop
PayPal named Mara McNeill as president of the proposed PayPal Bank, signaling that leadership planning is already in place ahead of potential approval.
The application comes amid a broader shift in the U.S. regulatory environment. Just last week, the Office of the Comptroller of the Currency (OCC) granted national trust bank charters to five digital asset firms, including Circle, Ripple, and Paxos, the issuer of PayPal’s PYUSD stablecoin.
Potential Implications for PYUSD
While the bank application is focused on traditional lending and savings, analysts note that a bank charter could eventually deepen the integration of PYUSD into the regulated financial system. PYUSD currently has a market capitalization of approximately $1.3 billion, and a banking framework could support broader institutional and consumer use over time.
A Longstanding Lending Business
PayPal is no newcomer to credit. Since 2013, the company has provided more than $30 billion in loans and working capital to over 420,000 businesses through its existing third-party banking arrangements.
If approved, PayPal Bank would bring much of that activity in-house, representing one of the most significant transformations in PayPal’s business model since its founding.
