The Wall Street Journal reports that PayPal is prepping to become somewhat of a real bank. The digital e-payment giant will soon roll out new services that will include ATM-compatible debit cards, direct deposit paychecks, and FDIC insurance among other traditional banking services.
Did PayPal get the license to operate as a bank?
PayPal remains an online digital wallet where one can send and receive payments electronically as well as store their money in digital form. It is not recognized as a traditional bank by any government around the world; the U.S. financial market regulator(s) have certainly not issued PayPal a license to operate as a bank.
To get around that legal bureaucracy, PayPal has partnered with several small banks to provide those services. That is to say, behind the PayPal interface, are some traditional banks running things except in this instance it is online on one of the most popular digital payment platforms.
For instance, it is the Delaware bank that will be handling issues related to debit cards; there will be another bank in Georgia that will be depositing checks users snap …read more