PayPal is one of the largest payment systems in the world, used by millions of customers and companies in different jurisdictions. The platform is widely used for international payments, e-commerce, IT business, online services, and freelancing. Recently, it became known that PayPal has applied for a banking license in the United States.
What is known at the moment
PayPal has initiated the procedure for obtaining banking status in the United States. It is about creating its own banking structure that will allow it to work within the framework of classical banking regulation, without involving partner banks.
It is worth emphasizing that PayPal is currently a payment system, not a bank. The process of obtaining a banking license is lengthy and requires approval from the US financial regulators. In fact, if PayPal's application is approved, the bank will operate within the framework of classical US banking regulation, which will change the approach to customer service and international payments.
Why PayPal is seeking banking status
The convergence of fintech companies with the banking sector is a global trend. For government regulators, this model means easier control over financial flows, compliance, and adherence to financial monitoring requirements.
For PayPal itself, a banking license can open up the opportunity to:
Directly work with deposits and loan products;
Expand financial services for businesses;
Enhance the stability and security of customer funds;
Operate within the framework of full-fledged US banking regulation.
How this may affect business
PayPal's bank status potentially means:
Strengthened KYC and AML procedures;
Intensified attention to beneficiaries and tax residency;
More detailed financial monitoring of international payments;
Possible changes to limits, policies, and internal audits.
For companies using PayPal in international payments, it is important to:
check the structure of the business and beneficiaries;
assess compliance with KYC/AML requirements;
analyze tax risks;
have backup payment and banking solutions.
The transition of payment systems to the banking format is a logical stage in the development of the financial market. For international business, this means not only new tools, but also increased attention to the structure of a foreign company, the origin of funds and compliance with financial monitoring requirements," says Managing Partner of Maira Consult Iryna Kucheriava.
PayPal may become a bank in the US - how will this affect international business?
The transformation of PayPal from a payment system to a possible bank is a signal for international business: payment services are gradually moving into the zone of stricter banking control. This creates new opportunities, but also requires more legal and financial preparation.
In such circumstances, the right choice of payment system and the correct opening of accounts become critical for the stable operation of the business. The Maira Consult team accompanies clients at all stages of opening accounts in payment systems and banks, taking into account KYC/AML requirements, business structure and specifics of international payments.
