PayPal (PYPL) Stock: Files Applications to Establish PayPal Bank

PayPal Holdings, Inc., PYPL

The fintech giant currently relies on third-party partners for much of its lending activity. Creating its own bank would let PayPal handle more of this business directly.

CEO Alex Chriss said securing capital remains a major hurdle for small businesses trying to grow. He added that establishing PayPal Bank will strengthen the companys business and improve efficiency.

What PayPal Bank Would Offer

The proposed bank would focus primarily on providing business lending solutions to small businesses in the United States. This builds on PayPals existing track record of helping small businesses access capital for expansion, inventory purchases, and operational needs.

PayPal Bank also plans to offer interest-bearing savings accounts to customers. If approved, customer deposits would be eligible for FDIC insurance coverage.

The company would seek direct membership with U.S. card networks. This would complement its existing processing and settlement activities through current banking relationships.

PayPal tapped Mara McNeill to serve as the banks president. McNeill brings over 25 years of financial services experience in banking, commercial lending, and private equity.

She previously served as President and CEO of Toyota Financial Savings Bank. Her appointment signals PayPals serious commitment to running a proper banking operation.

Stock Performance and Market Context

PayPal shares rose 1.5% in extended trading following the bank announcement. The stock closed at $60.74 on December 15.

Despite the positive reaction, PayPal stock has struggled in 2025. Shares are down about 29% for the year, while the S&P 500 has gained nearly 16% over the same period.

The stock trades 34.86% below its 52-week high. Its also trading below its 200-day moving average of $68.56.

PayPal reported quarterly revenue of $8.42 billion in October, up 7% from a year earlier. The results beat analyst expectations.

The company faces growing competition from other fintech firms that are also exploring banking licenses. Wise is considering a banking license in the United Kingdom and has applied to establish a national trust bank in Texas.

Revolut operates under a restricted banking license in the UK while regulators review its risk management. The competitive landscape for fintech banking continues to heat up.

The bank application is subject to regulatory approval and there‘s no guarantee it will be granted. PayPal’s forward-looking statements acknowledge that approval may not be obtained.

Trading volume on December 15 was 16,937,086 shares, about 4% above the 20-day average of 16,239,766 shares.

Summary: PayPal applied to establish an industrial bank in Utah to expand small business lending and offer FDIC-insured accounts.

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