PayPal Banking Charter Could Boost Lending and Consumer Finance

about 1 month ago

Lisa Mateo

"Let's go to PayPal. Uh PPPL their stock is gaining about one and a half% to 2%. Uh it's a payments firm. applied to become a bank in the US. You have the administration. They've kind of been loosening those regulatory reigns on on fintech companies entering the banking system. So, what's going to happen if this is approved? Well, PayPal Bank, it would basically help the firm boost its small business lending. Um, it's a big part of it. They have access to more than 30 billion in loans and capital since 2013, but they also want to improve consumer focused finance products. So, it's interested in offering customers interestbearing savings account. But we've heard this with crypto firms, right? It comes after a number of them gained preliminary regulatory approval to become banks last week. You had companies like Circle Internet Group, Ripple. Um, aside from crypto, you have Nissan's Motor Financing Arm earlier this year. They applied for the same charter that PayPal is looking to get. Uh, and Japan Sony Group, they've also applied to be a bank. So, we're seeing more of these companies apply to be banks. Interesting. >> All right. And PayPal, why not? I mean, you're already in the payments business."

The insight outlines PayPal's potential upside from obtaining a US banking charter, which could enhance its small business lending and consumer finance offerings. With regulatory easing on fintech banking and industry peers already moving in this direction, the commentary leans bullish on PPPL's near-term prospects.

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