Global payments company PayPal is pursuing the establishment of a bank specializing in small business (SMB) lending in the United States. This is seen as a move to expand beyond traditional payment and settlement infrastructure into a full-fledged financial institution.
According to cryptocurrency media outlet WatcherGuru, PayPal recently submitted an application to the Office of the Comptroller of the Currency (OCC) to establish a bank focused on small business lending. If approved, PayPal will move beyond being a payment service provider to a licensed bank that handles deposits and loans.
This move is an extension of PayPal's strategy to connect its vast payment data and merchant network to financial services. PayPal already offers prepaid services, sales-based loans, and automated settlement solutions to small businesses using its platform. If the bank is established, it will be able to move beyond its intermediary role and directly handle loan screening and funding.
The market is evaluating this as "a further step toward fintech banking." As big tech and fintech companies work to build financial infrastructure that bypasses or replaces traditional banks, PayPal is also actively pursuing a vertically integrated model that connects payments, lending, and deposits.
This bank establishment effort is particularly aligned with PayPal's stablecoin strategy. PayPal has already issued the dollar-pegged stablecoin PYUSD, and securing a banking license in the future will significantly increase the potential for integrating digital dollar payments, small business financing, and on-chain payment infrastructure into a single ecosystem.
For traditional financial institutions, the entry of payment companies into banking is expected to be another competitive factor. This also signals the blurring of financial service boundaries as global fintech companies directly enter the small business finance sector, previously handled by credit card companies and banks.
While PayPal's bank establishment approval and future business scope remain uncertain, the evolution of the payment platform into a financial institution is already considered irreversible.
