PayPal has officially applied to become a bank

PayPal, one of the world’s largest digital payment platforms, has taken a major step toward becoming more than “just a checkout button.” The company has officially submitted an application in the United States to obtain bank status—an unmistakable signal that it aims to offer banking services directly, not only payments.

The application is tied to a special U.S. banking framework known as an “industrial loan company” (ILC). This model can allow fintech firms to engage in traditional banking activities such as taking deposits and issuing loans. If approved, PayPal could offer customers direct bank accounts, savings products, and credit solutions—bringing under one roof many services it has previously provided through partners.

A key driver behind this move is PayPal’s ambition to scale financing for small and mid-sized businesses. While the company already provides various credit and cash-flow tools for merchants, a bank license could expand these offerings and make processes faster and more streamlined. The possibility of deposits falling under government-backed protection could also strengthen user trust.

Industry observers see PayPal’s initiative as part of a wider shift in fintech: more technology companies are pursuing banking licenses by aligning with regulation, blurring the lines between traditional banks and digital finance platforms. PayPal’s attempt stands out as one of the most notable examples of this global trend.

That said, approval is not expected to happen overnight. Banking applications typically involve extensive oversight, audits, and lengthy reviews. PayPal says it is preparing to meet regulatory requirements fully, and that a final decision will come after authorities complete their evaluations.

If the application is approved, PayPal could become a far more direct and influential player in the global financial ecosystem—while users gain access to broader banking services through a single platform.