Paypal moves to offer traditional banking services
Paypal expands its feature set by offering basic traditional banking services on top of it existing digital wallet.
These new services include Federal Deposit Insurance Corp. insurance for balances up to government-set limits, debit cards for ATM cash withdrawals, employer direct-deposit for earnings, and funds top-up through taking a picture of a paper check, reports The Wallstreet Journal.
Unlike traditional banks, which pay interest on balances, Paypal will charge 1 percent for paper check photo deposits and added fees for ATM withdrawals.
The goal of the company is not to replace traditional banks. Rather it offers an option to people with small balances, which is mostly overlooked by traditional banking systems.
“If you don’t have a bank account, you can’t take an Uber ride, can’t stay in a room on Airbnb,” said Paypal chief operating officer Bill Ready.
To build this system, Paypal worked with several small banks, which will largely work behind the scenes. Ready said this allows the company to get products to customers faster than banks. Alfred Bayle /ra