Ebay and PayPal finally announced their breakup this week, and so the online payments juggernaut will have the chance to chart its own destiny.
And when it does next year, I have some advice: Do something most people in Silicon Valley think is crazy. Become a bank.
Getting an official bank charter (or procuring one by buying a small bank) would mean that PayPal could conduct official banking business, like collecting deposits and making loans. It would also mean some new regulatory headaches, including possibly having to submit product plans for review ahead of time. For those reasons, entering the banking business has been a non-starter for many in Silicon Valley, who aren’t big fans of regulation or lack of flexibility, to say the least.
But for PayPal, the idea isn’t crazy if you look at the bigger picture.