PayPal targets the “unbanked” with debit cards and cheque cashing

Perhaps cognisant of the fact that last orders have been called at the eBay free bar, PayPal is looking into other services it could offer to keep itself at the forefront of people’s minds. The firm – one of Elon Musk’s first big successes, long before Tesla and SpaceX – is looking into expanding into traditional banking with its own debit cards, and a way for its users to cash cheques like it’s 1990.

For a company founded as a way to avoid the hassle of online banking for small payments, this may seem like a strange new direction to take, but PayPal COO Bill Ready says the company is aiming the new services at the “unbanked” who find themselves spending a lot of money paying off interest and lender fees. “We’re trying to bring more of those people into the digital economy,” he told TechCrunch. “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.”paypal_targets_the_unbanked_with_debit_cards_and_cheque_cashing_-_1

How can a company that isn’t a bank offer banking services? PayPal is partnering with a Delaware bank for the issuing of debit cards, while a bank in Georgia will handle the cashing of cheques. No, you don’t have to travel to Georgia for it – PayPal’s system apparently works by letting users upload a photo of their cheques.

There will be some fees involved – like ATM fees for debit withdrawals from machines not in the PayPal MoneyPass network, and cheques cashed will be subject to a 1% fee. Other than this though, there won’t be any monthly fees or minimum balances required.

It’s hard to imagine those with bank accounts being tempted away, but that’s not really who PayPal is aiming at. As Ready says, it’s the unbanked who are the target – and that isn’t just code for millennials, by the way. ““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.”

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