eBay looking to make PayPal an official bank
28 February 2007We’ve heard enough about WalMart trying to become a bank, now eBay is thinking about getting a Bank license for their subdivision PayPal. It would make sense after all. Most people mistakenly think that PayPal is a bank already. They do kind of operate in the same way. Paypal is technically a deposit broker. A kind of go-between for two parties who wish to exchange monies. Yes, you can do that through a bank, but there is much more that a real bank can do that PayPal cannot.
Probably most important to many of the PayPal detractors, they would then be FDIC insured as well as regulated by the FDIC. What that means is that if money is lost, it’s insured and that PayPal has certain regulations that it must abide by when moving, charging and otherwise handling your money.
Oddly, one of the largest hurdles to PayPal becoming an actual bank is eBay. If they had filed for their license before being purchased by eBay, they likely would have been approved almost immediately. Now, there is some potential legislation that may prohibit commercial companies from owning subsidiary banks. Keep an eye on the news, as many believe that an announcement by PayPal could be made soon if they truly decide to try for their banking license.
[tags]FDIC,banking,paypal,ebay,walmart,bank[/tags]
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