• by Laurie Sullivan , December 15, 2025

PayPal has applied to become a U.S. bank, submitting the required applications to federal and state regulators on Monday to become a Utah-chartered industrial loan company (ILC).

The company based the unusual move on the Trump administration’s openness for financial-technology companies entering the banking system.

It submitted applications to the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions to form a Utah-chartered industrial loan company, according to a statement released today.

"Securing capital remains a significant hurdle for small businesses striving to grow and scale," said Alex Chriss, president and chief executive officer at PayPal. "Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the U.S." 

eBay acquired PayPal Holdings in 2002, and is now run by Chriss.

PayPal Bank, if approved, would improve its small business lending capabilities, providing businesses -- including advertisers -- with more accessible capital to invest in advertising and marketing campaigns as well as other related growth initiatives. 

Customer deposits at PayPal Bank would also become eligible for FDIC insurance coverage. 

Reinvesting ad revenue into PayPal Ads Manager -- which the company launched in October and is expected to expand in early 2026 -- would give small businesses financial support to monetize their own store traffic by hosting ads.

As the online advertising industry makes major changes with the introduction of AI agents, revenue generated from PayPal ads can be deposited directly into their PayPal account to be reinvested into new marketing campaigns or inventory.

The shift also would allow PayPal Bank to offer interest-bearing savings accounts to customers. The company said it would seek direct membership in the U.S. with card networks to complement processing and settlement activities through existing banking relationships. 

Mara McNeill will serve as PayPal Bank's president. McNeill has more than 25 years of financial services experience in banking, commercial lending and private equity.

Before joining PayPal, she served as president and CEO of Toyota Financial Savings Bank.