By Oliver Smith on Wednesday 22 September 2021
Only in the US for now, but PayPal steps closer to becoming a financial powerhouse.
For more than 20 years, PayPal has focused on doing just what its name suggests, enabling online payments. Those days could now be coming to an end as the fintech transitions to become a fully-fledged banking service.
This week, that transition continued with PayPal’s new US mobile app, containing payments and holding customer deposits, crypto investing, person-to-person messaging, buy now, pay later services, and, for the first time, high-yield savings accounts.
PayPal’s easy access savings account pays 0.4 per cent on cash, six times the US national average being paid on savings accounts right now.
The second headline feature is Direct Deposit, letting customers access their salaries two days early if they direct their paychecks to PayPal—similar to Monzo’s Get Paid Early feature.
All the new headline features are exclusive to the US, as PayPal’s partner bank Synchrony Bank is enabling them.
PayPal is also clear that these banking features aren’t about becoming a ‘bank’, but are about turning PayPal into a banking hub that provides many—if not all—of the features that customers would previously have used a bank for.
Plus in the coming months and quarters, the fintech says it will be adding even more features, including investments, QR codes for offline payments, and even more ways “to shop and save in-store”.
For years many have wondered whether the ‘super apps’ of Asia could be replicated in Western markets, bundling services from messaging apps to wealth management and everything in between.