PayPal is beginning to offer some standard banking features to users such as debit cards and direct deposit, among other features which you would normally get with a bank or credit union. For PayPal users which don’t have a bank account with a traditional banking institution, these new options will allow them to access certain digital economy services which are really only available to consumers which do have a bank account, like requesting Uber rides or renting Airbnb lodging. At least, that’s part of the goal.
While not all types of features that you would get with a traditional bank are being offered as part of PayPal’s push into this financial sector, users will have the ability to set up direct deposit for paychecks, allowing their employers to deposit that money directly into the person’s PayPal account. Insurance for consumer balances is also being offered through Federal Deposit Insurance Corp., with limits being equal to those that are set by the government.
With the debit cards that are being offered users would be able to pull money out of ATMs like with a mainstream debit card, though it is stated that utilizing this particular service would charge the user a fee if the ATM isn’t one which is included in PayPal’s list of partner banks, which reportedly sits at around 25,000 different institutions, all of which are smaller banks as well. On top of that fee, there is also a 1-percent fee for depositing checks using a photo, and consumers aren’t going to be earning any interest on balances they have as part of the account. This might steer away some customers, and prompt them to seek accounts with more mainstream banking institutions. That said there is no minimum balance that customers will need to keep in order to keep their account with PayPal open and there are no monthly fees being charged, something which can’t be avoided at some traditional banks. In addition to adding a few banking features, PayPal support was also recently added for Samsung Pay users.