New Delhi: PayPal is trying something big, and a bit old-school, at the same time. The payments firm best known for online checkouts and Venmo has applied to become a bank in the United States. The move puts PayPal closer to the core of the financial system, at a time when fintech firms are testing how far they can go beyond apps and wallets.

The company’s application comes amid a more welcoming mood in Washington toward financial technology firms entering regulated banking. PayPal confirmed on Monday that it has filed paperwork to set up a new banking entity in Utah, with eyes on lending and savings products.

PayPal applies to form PayPal Bank

PayPal Holdings Inc. said it has submitted applications to the U.S. Federal Deposit Insurance Corporation and the Utah Department of Financial Institutions to form a Utah-chartered industrial loan company. If cleared, the entity will be called PayPal Bank.

In a statement, the company said the bank would allow it to offer loans to small businesses more directly. PayPal added that it has already provided access to more than $30 billion in loans and capital since 2013, mainly through its existing credit products.

“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.,” PayPal CEO Alex Chriss said in the statement.

For many users, this sounds like a natural extension. I still remember using PayPal years ago just to split a dinner bill with friends. Over time, it quietly added credit lines and merchant tools. Becoming a bank feels like the next logical step, even if it comes with more rules and paperwork.

Why Utah and what an industrial loan company means

PayPal’s choice of Utah is not random. Industrial loan companies, or ILCs, are a special type of bank charter allowed in a few U.S. states. They can offer loans and take insured deposits, but they sit slightly outside the traditional bank holding company structure.

This model has been used by other financial firms that want banking access without turning into full-scale banks overnight. For PayPal, it offers a way to expand lending and savings services while keeping its core payments business intact.

The FDIC and Utah regulators will now review the application. Approval is not guaranteed, and the process can take time. Regulators will look closely at risk controls, capital buffers, and how customer money is handled.

More banking features, more competition

PayPal said it also wants to offer interest-bearing savings accounts if the bank is approved. That would put it in direct competition with both traditional banks and newer fintech apps that already offer high-yield savings.

The company owns Venmo, a popular peer-to-peer payments app in the U.S., and has been pushing deeper into banking-style services over the past few years. Credit lines for consumers are already part of the offering. Small business loans are another focus area.

The backdrop is crowded. Many fintech firms are trying to pull customers away from brick-and-mortar banks by offering faster apps and fewer fees. PayPal’s brand recognition gives it an edge, but regulation raises the bar.