Will Acorns is going to be a bank soon

Bank current

Image source: paypalobjects.com / Paypal

The German banks are facing new competition in their core business: PayPal, the international market leader for digital payments, has invested a double-digit million amount in the start-up “Raisin”, which is known in this country under the brand “Weltsparen”. The startup offers its customers access to overnight and fixed-term deposits throughout Europe with comparatively high interest rates of more than two percent.

Abroad, higher interest rates on overnight and fixed-term deposits

While some banks in this country are already charging negative interest rates, Raisin customers can invest their money in banks in other European countries that pay higher interest rates than German financial institutions. There are currently around 40 partner banks from 17 countries to choose from. The transactions themselves are then processed via the partner bank MHB, as Raisin does not have its own banking license. With its investment, the US financial giant PayPal now apparently wants to enable its customers to also invest money in the future.

How exactly the offer will look is currently still open. However, it should be similar to that of the fintech N26, which has already integrated Weltsparen. In a statement, Raisin founder Tamaz Georgadze said he was excited about working with PayPal and making his company's products more accessible to hundreds of millions of Europeans.

European counterpart to Acorn

The partnership means a turning point for the European banking landscape, because it would be the first time that PayPal is offering its customers outside the USA an independent savings product. The “PayPal Bank” already exists in Luxembourg, but its product range is very manageable and is limited, for example, to dealer loans for shops that offer PayPal as a payment method. This is different in the USA, where PayPal recently added the digital asset management of the robo-advisor “Acorns” to its portfolio. With Weltsparen they now obviously want to create a European counterpart for entry into classic retail banking.

Image source: paypalobjects.com / Paypal
To press