The Jack Dorsey-backed Square has launched Square Banking, a suite of financial products purpose-built to help small business owners easily manage their cash flow and get more out of their hard-earned money.
Coming on the heels of Square’s industrial bank – Square Financial Services, which began operations in March – Square Banking represents a major milestone in the company’s continued efforts to expand access to financial tools for underbanked populations and marks the beginnings of the company’s journey to provide more banking solutions to small businesses.
“Small businesses are the heartbeat of our communities and our economy. From our earliest days, Square has focused on building easy-to-use tools and services to empower entrepreneurs to succeed on their own terms,” said Christina Riechers, Square Banking’s Head of Product.
“Historically, small businesses have had to contend with numerous hurdles while trying to access vital financial services that are often readily available to larger companies. With Square Banking, we’ve reimagined the financial system for small business owners with their cash flow needs at the centre. 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 personalised financing offerings.”
Square Banking consists of three core products designed to help small business owners confidently manage cash flow stress. Two new deposit accounts – Square Savings and Square Checking – join its existing lending capability, which is now called Square Loans. By offering essential banking tools that work seamlessly with Square’s ecosystem of solutions like payments and Square Payroll, sellers now have a single home for their entire business, gaining a unified view of their payments, account balances, expenditures, and financing options.
Small business owners recognise the value of setting aside funds, but the day-to-day challenges they face trying to manage their cash flow can make it difficult to build up a cash buffer. Square Savings offers them a simpler way to start or continue building up their cash reserves.
With automated savings, Square Savings removes the friction from setting aside funds, enabling sellers to effortlessly save a percentage of every sale they make. To better help businesses organise their savings, it also offers customisable folders that sellers can use to save for specific goals and priorities, like purchasing new equipment or paying quarterly tax obligations. These FDIC-insured accounts offer a 0.5% annual percentage yield, and have no minimum deposits, balance requirements, or account fees.
Since Square first introduced its Debit Card, adoption has increased every quarter as more sellers seek a way to decouple their personal and business finances and immediately access and spend their earned funds. In 2020, the number of active Square Card sellers increased 140% year over year, and the total balance stored by these sellers increased 250% in the same time period. Square Checking builds off the company’s existing business banking tools, and in partnership with Sutton Bank, offers sellers an FDIC-insured business checking account that provides instant access to card sales they process via Square.
With Square Checking, Sellers can immediately spend their funds with their Debit Card, send and receive money via ACH with new account and routing numbers, or use their balance to pay their teams with Square Payroll. It has no account minimums, overdraft fees, or recurring fees, and sellers are able to instantly move funds between their savings and checking accounts whenever they need to, at no cost.
Financing is critical for small businesses looking to grow or gain better control over their cash flow, and yet, according to the Federal Reserve, fewer than half of small businesses report that their credit needs are met. Square Loans has facilitated more than $9 billion in small business loans to more than 460,000 Square sellers, with an average loan size of $6,750.
Square Loans continues to give sellers increased access to credit with proactive loan offers that are uniquely tailored to their business needs and can be automatically repaid through a percentage of their daily sales. Square Loans is personalised financing based on sales, not credit history.
