Thats not 100% true. Paypal may very well own a bank, or at the very least cooperates with a bank, to stay in compliance with some of the services its offers.

Financial services companies are often a complex arrangement of licensed and/or white-labeled services that are necessary to maintain compliance with regulations in the multitude of jurisdictions in which they operate.

PayPal does not have a banking license so they must partner with banks to other some services. Similar to Apple offering 0% loans on iPhones with Citizens or loans with interests for Macs using a Barclay credit card.

While a little off-topic, since this is an article about the US, PayPal does have a European banking license: https://web.archive.org/web/20161122071031/http://www.e-coml...

But they need a license, right?

PayPal is a money transmitter, which requires a different federal license than a state or federal banking license.