PayPal is looking to expand into something closer to a real bank, according to a report in The Wall Street Journal. It is beginning to implement more traditional banking services for customers, including ATM-compatible debit cards, direct deposit checks and FDIC insurance.
How PayPal can do this really is fascinating since it does not really have a banking license in the United States. According to The Wall Street Journal, the company is solving that by silently partnering with several small banks that can provide those services. So behind the scenes, PayPal does not execute these services, but a Delaware bank handles debit cards, a bank in Georgia deposits checks from users, and Utah banks offer loans to customers and small businesses.
No monthly fees or minimum balance requirements to use the services
So far, PayPal has only been offering the functions to a small group of customers. Apparently, there is no monthly fee or minimum balance to use the services, but users must pay ATM fees for using machines that are not in the PayPal network and pay more than 1 percent of any check deposited through the system. Smart phone camera.
According to Bill Ready, PayPal's director of operations, the company does not seek to replace traditional banks in the short term with the new service. Instead, it wants to offer banking options to customers who have not normally been able to take advantage of them (something that the company considers increasingly important in today's digital economy). According to Ready, if you already have a bank account connected to your PayPal account, "this is not an account for you."