A new era is supposed to start for PayPal. It appears that PayPal is planning to release a new series of services that are similar with the ones offered by banks. This information was released by a report in the Wall Street Journal.
Numerous banking services will become available really soon, including FDIC insurance, direct depositing paychecks, as well as ATM-compatible debit cards. However, it is incredible that PayPal is able to do that. Normally, there is no banking license for PayPal in the United States.
Partnering with small banks
PayPal is able to offer with all those services by partnering with some small banks. This means that PayPal won’t be the one that will handle the debit cards or the loans directly. These features will be handled by various banks.
At the moment these features have already become available, but only for a small number of customers. As it turns out, these services are available for free, and they do not require any monthly fee or minimum balance. However, ATM fees will be required when customers will use the machines.
These new services are great for the persons who are not able to access traditional banks. That is because there are many people with low credit who are denied certain baking services. Additionally, many banking services alternatives are not safe enough so PayPal will represent a better option for all of them.
Bill Ready, the COO of PayPal appears to be aware of these problems and he states that the new services are not here so that PayPal can replace traditional banks. He even added that if a customer already has a bank account that is connected to the PayPal account, then “this isn’t an account for you.”