Square launches suite of savings, checking and loan services in major banking push

Building on the success of the Square Debit Card and Square Capital, the company is launching Square Banking, a combination of savings, checking and loan services for Square merchants.

Square is unveiling a new product suite that further blurs the line between the technology company and financial institutions. Building on the success of the Square Debit Card and Square Capital, the company is launching Square Banking, a combination of savings, checking and lending services for Square merchants. 

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Powered by Square Financial Services -- Square's industrial bank that began operating in March -- Square Savings is a new FDIC-insured deposit account that lets sellers put away a percentage of each sale they process through Square into a high yield account. Merchants can also organize their savings with folders as a means to track specific priorities and goals, such as saving for quarterly taxes or an emergency fund.

Square Checking builds off of Square's existing business banking and cash flow management tools, providing sellers with a FDIC-insured account from which they can instantly access sales and immediately use those funds via the Square Debit Card and ACH transfers, or to pay their teams with Square Payroll. Square launched its debit card in January 2019. By the end of 2020, Square said the number of active Square Card sellers increased 140%.

Square Loans, meanwhile, is essentially a rebrand of Square's existing lending entity, Square Capital. It offers eligible sellers proactive financing options based on their processing data with Square. Sellers are able to automatically repay loans with a percentage of their daily Square sales. Square launched Square Capital back in 2014.

Square has been laying the groundwork for its financial services expansion for years, but the company said Square Banking represents just the beginnings of the company's efforts to provide more banking solutions to small businesses.

"With Square Banking, we've reimagined the financial system for small business owners with their cash flow needs at the center," said Christina Riechers, Square Banking's Head of Product. "We're introducing fair, accessible financial services that connect directly with our sellers' payments, helping them unlock instant access to their sales, automate their savings, and receive personalized financing offerings."

San Francisco-based Square, founded and run by Twitter CEO Jack Dorsey, has greatly diversified its portfolio over the years, expanding into an array of financial services and lending, and building tools for small business management including email marketing, payroll, and customer management. Its hardware portfolio, which helped put the company on the map, is now one of its smaller revenue lines. 

Meanwhile, Square's bitcoin-enabled Cash App has emerged as the shining jewel of the company's portfolio, with income from the app driving a surge in Square's net revenue and gross profit in the company's first quarter financial results. The Cash App now counts for nearly half of Square's quarterly income. 

Just last week, Square announced another bitcoin-focused project named "TBD", which Dorsey described as a platform for developers to create open-source financial applications that are decentralized, permissionless and non-custodial. The new business will join Seller, Cash App and Tidal (which Square acquired a majority stake of back in March) as one of the sub-units of Square.