It sounds strange but the Telegraph is reporting that PayPal has been granted a banking license in Luxembourg and is moving their headquarters to the tiny country. Back in 2004, PayPal became a licensed Electronic Money Issuer and had operated under the FSA. In March of this year, Google was also granted this same FSA license in the UK. The move to Luxembourg means PayPal will no longer be authorized by the Financial Services Authority.
eBay who owns PayPal has been fighting back new competition for those retail online dollars. In recent months Google Checkout, nicknamed ‘The PayPal Killer’ has gained in popularity with retail merchants around the globe.
However in places like the UK, PayPal is still on top of Internet commerce. In Britain, more than half of the population is now online and half of that group uses PayPal. Throughout Europe and the UK, PayPal has captured over 50 million users so I suppose the move into banking was just a matter of time.”