Square Business Bank Accounts: Launch & Features

Square Launches Comprehensive Banking Solutions for Businesses

Square is systematically developing a complete banking platform, built from the ground up. Today marks a significant step with the introduction of Square Banking, a suite of financial tools encompassing checking accounts, savings options, debit cards, and loan facilities.

Expanding Beyond Payments

Initially recognized for its payment processing capabilities, Square first introduced a debit card for its business clientele in 2019. This allowed entrepreneurs to immediately utilize funds received through Square payments, eliminating the need for transfers to external bank accounts.

New Checking and Savings Accounts

The current launch extends Square’s offerings with the addition of both checking and savings accounts. Funds from each sale are directly accessible through the new Square checking account. These accounts feature no monthly fees, require no credit verification, and have no minimum balance stipulations.

As a standard checking account, users receive dedicated account and routing numbers, enabling direct sending and receiving of funds. Currently, these checking accounts are facilitated by Sutton Bank and are protected by FDIC insurance.

Automated Savings Features

Square now facilitates the opening of savings accounts as well. Leveraging its existing sales management tools, the company allows users to automatically allocate a chosen percentage of their Square sales revenue to savings on a daily basis. Users can also categorize savings into distinct folders for specific business purposes, such as taxes or equipment purchases.

The current annual percentage yield (APY) offered is 0.50%, though this rate is guaranteed only until the end of 2021. Transfers between Square savings and checking accounts are both free and instantaneous. Savings accounts are also covered by FDIC insurance.

Integrated Business Loans

Square is also integrating its business lending services with its broader banking products. Formerly known as Square Capital, this offering is now simply called “Loans”. Recent approval of the charter for Square Financial Services underscores the importance of lending to the company’s overall strategy.

Simplified Loan Repayments

Compared to conventional business loans, Square’s repayment structure is streamlined. Repayments are made as a percentage of daily card transactions, meaning higher sales result in larger payments, and lower sales lead to smaller payments. A minimum payment is required every 60 days even during temporary business closures.

Targeting Existing Square Users

Square Banking is poised to be particularly appealing to small businesses already utilizing Square for processing both in-person and online transactions. These customers may find themselves relying less on separate, traditionally managed bank accounts as Square continues to expand its integrated financial services.