Paypal invests $135 mn in FIs that serve black and underserved communities

By Pavithra R

Paypal Holdings has announced depositing $135 mn of its capital into mission-driven financial institutions and management funds that help underserved communities of color to fight barriers to economic equity.

The roster includes  Hope Credit Union,  OneUnited Bank, Self-Help Federal Credit Union, CNote’s Wisdom Fund and various smaller institutions through a CNote Promise Account. These investments are  part of PayPal’s $535 mn commitment to strengthen Black businesses and underserved communities, and help drive financial health, access and generational wealth creation.

“By partnering with financial institutions that have deep ties to Black and other underserved communities of color, we can create economic opportunity and make tangible progress toward closing the racial wealth gap. Addressing systemic economic disparities and injustice will take sustained action across the private and public sectors. We are committed to doing our part to break the cycle of inequality,” said Dan Schulman, president and CEO, PayPal.

With these deposits, PayPal has now committed more than $500 mn of capital through its racial equity initiatives, including a deposit in Optus Bank; an investment in LISC’s Black Economic Development Fund; investments in 19 Black and Latinx-led venture capital funds; and grants to Black-owned small businesses and community nonprofits that support them. The firm is in active conversations with several additional financial institutions and expects to deploy more funds throughout the year.

“Financial institutions owned by people of color play an outsized role in closing the racial wealth gap by providing greater access to financing for diverse business owners and homebuyers. Unfortunately, investment in these institutions and the communities they serve has never been adequate. PayPal’s strategy recognizes that in an increasingly diverse nation, investing in racial equity is not only the right thing to do, but it’s good for business,” said Bill Bynum, CEO, Hope Credit Union.

Established in 1998, PayPal is an American company operating a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders. The company has remained at the forefront of the digital payment revolution for more than 20 years.