- Payments processor begins offering debit cards, check deposit and other conventional banking services to users
- Offerings aimed at serving customers without traditional bank accounts
- Small-scale rollout planned as company irons out licensing issues
International money transfers giant PayPal is hoping to expand even further into the payments market by offering a range of conventional banking services to users. Offerings include ATM debit cards, direct deposit and FDIC protection for account balances.
Officials say the move is meant to assist customers without traditional bank accounts who may lack access to convenient, affordable basic financial services.
While PayPal does not have a US banking license, the cross-border payments company is taking the time to ensure its offerings are in compliance with regulations. To that end, PayPal is partnering with small banks to facilitate services.
So far, PayPal has agreements with a Delaware bank to provide debit card services, a Georgia bank to handle check deposit and several Utah banks for lending and small business services.
PayPal has said it will provide most of its traditional banking services without monthly fees or minimum balance requirements. Users will, however, have to pay a fee to use a non-network ATM and a 1% fee for check deposits made via Android mobile devices.
Banking options through PayPal are currently available to a small group of users, but the company hopes to expand these services to other customers soon.
According to PayPal COO Bill Ready, the expanded offerings aren't necessarily positioned to replace conventional banking for most users. The goal, instead, is to offer more choice for people who may not have access to traditional bank services.
"For folks who don't have bank accounts, for folks who don't have credit and debit cards, we want to give them something so they're not turning to prepaid cards, check cashiers and payday lenders," Ready said.
