PayPal applies to form bank that can offer small business loans and savings accounts

In a significant move for the fintech sector, PayPal announced on Monday its intention to establish PayPal Bank, a new entity aimed at providing loans specifically designed for small businesses. CEO Alex Chriss emphasized that the creation of PayPal Bank is not only a strategic step to enhance the company's operations but also a commitment to fostering small business growth and expanding economic opportunities throughout the United States. The application for PayPal Bank will undergo scrutiny from the U.S. Federal Deposit Insurance Corporation, in conjunction with oversight from Utah's Department of Financial Institutions. This initiative comes as PayPal, known for its widely-used payment platform Venmo, aims to diversify its offerings by providing interest-bearing savings accounts to its clientele. Already a player in the credit space, PayPal is ramping up its banking-like services in an increasingly competitive landscape filled with fintech startups vying for market share against traditional banks. Following the announcement, PayPal's stock saw a 1.5% increase in after-hours trading. In related financial news, PayPal revealed a 7% year-over-year rise in quarterly revenue, totaling $8.42 billion, surpassing analysts' expectations. However, the company's stock has faced challenges, with a 29% decline in 2025, contrasting with a nearly 16% rise in the S&P 500 index during the same timeframe.