The latest PayPal decision makes the future of banking mirror its past. Last orders have been called at the eBay free bar, and PayPal is probably aware of this because it began searching other services that it could offer.
PayPal is looking into expanding into traditional banking with its very own debit cards and also a way for its users to cash cheques just like in the 90s.
PayPal was founded as a company that used to avoid the hassle of online banking for small payments, so this latest decision seems a bit awkward.
PayPal aims new services at the “unbanked”
PayPal COO Bill Ready stated that the company is aiming the news services at the “unbanked” customers who spend lots of cash paying off interest and lender fees.
“We’re trying to bring more of those people into the digital economy,” he told TechCrunch.
“Those that are unbanked don’t have access to traditional financial services. We’re giving them a pathway to the digital economy.”
“For folks who don’t have bank accounts, for folks who don’t have credit and debit cards, we want to give them something, so they’re not turning to prepaid cards, check cashiers and payday lenders,” Ready continued.
How can PayPal offer banking services?
If this question popped into your mind as well, the answer is that the company is teaming up with a Delaware bank for issuing debit cards.
Another bank in Georgia will be handling the cashing of cheques.
PayPal will work by letting you upload a photo of your cheques, and this means that you won’t have to travel to Georgia for this, so don’t worry.
What sort of fees can you expect?
There will also be some fees involved in this whole scheme, just like the ATM fees for debit withdrawals from machines that are not in the PayPal MoneyPass network.
The cheques cashed will be subject to a 1% fee. Besides these, there won’t be any other monthly fees or minimum balances involved.
It’s pretty hard to imagine that someone with bank accounts would be lured away towards such a system, but PayPal is not targeting such audience anyway. The “unbanked” are the primary focus.
“The divide isn’t necessarily along generational lines,” Ready said. “Those that are unbanked don’t have access to traditional financial services. We’re giving them a pathway to the digital economy.”