It's not. It is an electronic money institution, which is far from a bank, it can only keep customer funds and process payments.

I don’t know the difference, but it does say that on the tin: https://www.paypal.com/lu/webapps/mpp/about

> PayPal (Europe) S.à r.l. et Cie, S.C.A. is a credit institution (or bank) authorised and supervised by Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (or CSSF). CSSF’s registered office: 283, route d’Arlon, L-1150 Luxembourg.

That is a very selective and borderline illegal description they are using. A bank is a credit institution, but now every ci is a bank.

Paypal and revolut are 100% not banks, they are financial institutions or emis, They can manage your money but not lend out anything and they have to hold the assets at 3rd party banks.

A bank can lend out deposits, ie. client money, ie. someone else's money. A normal regulated entity, like say an exchange, cannot.

Can't comment re PayPal specifically.