They just filed for an Industrial Loan Company (ILC) charter. If approved, this changes the game:

🔹 Cheaper Capital: They can hold deposits directly (low-cost funding) instead of relying on expensive partner banks.

🔹 Fat Margins: By lending directly to merchants/SMBs, they keep the full profit spread.

🔹 Independence: Cuts out the middleman (partners like WebBank or Synchrony).

Regulators traditionally block "Big Tech" from getting banking licenses (remember Walmart?), but the current administration might be more open to it.

If this passes, it’s a massive long-term catalyst for profitability and margin expansion. Watch closely.

Here’s the thing with PayPal

Most people have written it off because the stock price has done nothing for the last 3 years 

But the reality is the fundamentals of the company have drastically improved

When PayPal CEO took over in 2023 he faced; 

Margin compression

Losing active accounts

Branded competing with unbranded

Unprofitable growth

Ambitious targets being missed

The biggest bear cases at the time

- Paypal will continue to lose market share

- Paypal will not be able to address margin compression

- Paypal will not be able to grow active accounts

- Nobody uses PayPal

- Venmo will eat PayPal’s lunch (lol)

- Apple will eat PayPal’s lunch

- Block will eat PayPal’s lunch

- Adyen will eat PayPal’s lunch 

- PayPal does not innovate 

Here’s what has actually happened 

Margin inflected

Active accounts inflected

Unbranded no longer competing

All business segments unified

Massive $20B total buyback program

Under promise/over deliver culture

Repeated beat and raises 

Company has never stopped growing

Growth is now profitable consistently

EPS is growing almost 20%

Shares now well under 1 billion

Market share is maintained

International expansion

People realised PayPal owns Venmo

Apple didn’t eat PayPal’s lunch

Neither did Block or Adyen 

A raft of innovation took place 

Fastlane

One-click guest checkout for faster online transactions

PayPal Open

A unified commerce platform integrating with merchant systems

PayPal USD (PYUSD)

A U.S. dollar stablecoin for payments and transfers

AI-Driven Features

Personalised Smart Receipts and Advanced Offers Platform for tailored recommendations and cashback

PayPal World

A global platform connecting payment systems and digital wallets

Crypto Integration

Enabling U.S. merchants to use crypto for payments

Venmo Enhancements

Revamped business profiles for better customer engagement

In-Person Payments

Debit card integration with Apple Pay and 5% cashback program

PayPal Ads Expansion

International rollout of advertising solutions.

Please do your own research