PayPal – an unlikely contender to become a UK Bank?

If you watched the BBC breakfast news today you’d have seen their top story that was the government plans to create three new high-street banks from the Royal Bank of Scotland, Lloyds and Northern Rock. Separating some of the good assets from the toxic loans the new banks would be sold to companies not already in the banking industry.

The low down is that Richard Branson and Virgin Money could be in the running to bid for a bank, they already applied to the FSA for a banking license back in October. The bank of Tesco was another possibility the BBC mooted.

There is another company it might be worth placing an outside bet on to become a bank. PayPal already have an EU banking license which was granted to them in May 2007. They’re one of the most ubiquitous payment methods in the UK – almost everyone who has an eBay account also has a PayPal account. They’ve already diversified with PayPal credit cards and PayPal topup cards so why not get into mortgages and deposit accounts?

Back in 2007 PayPal said there were no plans to use the new licence to offer traditional banking services but that was two years ago and it’s not often the opportunity arises to buy a fully fledged bank along with existing deposit customers and mortgages. Whilst there has been no indication that PayPal may have changed their mind I wonder what services the Bank of PayPal could offer?

6 Responses on "PayPal – an unlikely contender to become a UK Bank?"

1. 1
   Andy says:

   November 1, 2009 at 5:03 pm

   Will it cost a fiver to withdraw your money today and free if you’re happy to wait 5 days?
2. 2
   board_surfer says:

   November 1, 2009 at 8:18 pm

   Im sorry Mr Smith, we know you have 10,000 in your accoount but we are keeping 3 grand of it just in case you turn out to be a bad boy, not that we think you are a bad boy but just in case.

   that will be 2.5% please

   have a nice day.
3. 3
   Bigpoppa says:

   November 1, 2009 at 10:09 pm

   I wouldn’t let Paypal within 10 feet of my mortgage
4. 4
   Lino says:

   November 2, 2009 at 9:28 am

   Personally I think it’s a great idea. I’d love there to be a branch of Paypal on the High Street. I could sit down face to face with somebody and find out exactly why they’re holding $16,000 of the money I’ve earned selling on the auction site where they have a monoploy of payment method.

   And then I could ask them about ‘problems with funding source’ issues, 2 weeks after being told to send the goods…
5. 5
   Haggis2009 says:

   November 2, 2009 at 11:14 am

   It would also mean they would be resident in the UK again. Rather than hiding in Luxemburg. I can see a lot of work for the small claims courts around the UK if they do return.
6. 6
   Gerry007 says:

   November 2, 2009 at 12:54 pm

   Defintely a GREAT idea…..

   Then I could go in and personnlly Thump the idiots that keep giving buyers my money back.