PayPal reveals intentions to expand its business to a more traditional banking service, as announced by the company on April 12, 2018.
PayPal is planning to provide more traditional banking services to customers, including ATM-compatible debit cards, direct depositing paychecks, and FDIC insurance.
PayPal does not actually hold a banking license in the U.S., which is why it seems fascinating as to how the company is planning on making the move. The company is reportedly partnering with several small banks that can provide banking services, which is why banks will be running PayPal behind the scenes. A Delaware bank reportedly handles debit cards, a bank in Georgia deposits checks that users take pictures of, and banks in Utah offer loans to customers and small businesses.
PayPal started off by offering these features to a small group of customers, with no monthly of any kind or a prerequisite of minimum balance to use the services. Users will, however, be required to pay ATM fees for using machines that are not a part of PayPal’s network. They are also required to pay over 1 percent of any check they deposit through the smartphone camera system.
According to Bill Ready, PayPal’s COO, the company does not wish to replace traditional banks anytime soon with the launch of its new service. Instead, it wants to offer banking options to customers that have not been able to take complete advantage of them. According to Bill Ready, if you already have a bank account connected to your PayPal account, “this isn’t an account for you.”