PayPal to offer high yield savings account as part of app redesign
The account is expected to offer an annual percentage return of 0.4% when it debuts in the coming months.
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PayPal Holdings Inc. will join the multitude of companies offering a high-yield savings account in a major overhaul of the fintech giant’s app.
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The account, which will be provided by Synchrony Financial, is expected to offer an annual percentage return of 0.4% when it launches in the coming months, PayPal said in a statement Tuesday. The company will also add new shopping tools and give users the ability to message each other after peer-to-peer payments made on its site.
PayPal has been working on new features for its app as part of its efforts to move from a simple online payment button to a one-stop-shop for consumers’ financial needs. In the coming quarters, the payments giant said it also plans to add investment capabilities and other ways to use its services to pay in stores.
“The past 12 to 18 months have been among the most productive in terms of product pace in company history,†said Julian King, senior vice president of PayPal Consumer, in an interview. “We should expect to continue this pace of innovation.”
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At 0.4 percent, the yield on PayPal’s new savings account is more than six times the national average. Still, that’s less than the rates offered by other popular high-yield savings accounts at Goldman Sachs Group Inc. or LendingClub Corp., according to Bankrate.
As part of the changes to its app, PayPal will also improve its offerings that allow customers to pay various bills, including those from utilities, television and internet providers, insurers, and credit card companies. Some of the new shopping tools will also allow users to browse discounts and buy from different retailers right in the app.
PayPal is ultimately betting that it can represent a larger part of consumers’ lives than Amazon.com, Google, or Facebook Inc. – like Alipay or WeChat in China, Paytm in India, or Grab in Singapore. Yet the United States is full of banking giants and tech companies that have tried and failed to accomplish what PayPal wants to do.
“I think there are few companies in the world that can even aspire to this vision,†CEO Dan Schulman told investors in February. “We can be that business. “
Bloomberg.com