News

PayPal offers FDIC-insured, ATM-enabled account option for un-, underbanked

April 10, 2018

With the addition of an ATM card that can be used at 25,000 U.S. ATMs, mobile check deposit (or direct deposit) and FDIC insurance for funds held in a PayPal mobile wallet, the erstwhile online payments provider is edging ever closer to the mainstream banking market.

In a recent Wall Street Journal report, the company said it was aiming for customers who are typically un- or underserved by the traditional banking sector, offering them a way to participate in the digital economy.

According to WSJ, rather than becoming — or purchasing — a bank in order to provide these retail banking functions, PayPal has pieced together the various the features of a retail banking account through a patchwork of third-party agreements with small banks: a card issuer agreement here; an ATM network deal there; and so on.

The services aren't free — an RDC check deposit comes with a 1 percent fee and cardholders pay a surcharge for out-of-network ATM transactions — and accounts don't accumulate interest.

Still, it's cheaper than most check-cashing services and it's undoubtedly safer than carrying your entire bankroll in your pocket.