Now that Square has its own banking charter announced here, it appears that they will put that to use by offering account services to small businesses. This hasn’t been launched yet or even announced, but evidence in lines of code discovered by an app developer suggests they will offer checking and savings accounts and an associated debit card.
The Washington Post article on the topic believes that the accounts will be free of monthly maintenance fees and overdraft fees as many small business accounts are with traditional financial institutions based on the relationship of the business.
Square Inc., whose technology has already upended the way small businesses take card payments, is quietly preparing to offer checking and savings accounts to those customers, taking direct aim at behemoths such as JPMorgan Chase & Co. Square’s shares jumped on the news.
With the checking-account offering, Square is taking even more direct aim at a business dominated by the likes of JPMorgan, Wells Fargo & Co. and Bank of America Corp. Financial institutions and their trade groups have grown increasingly vocal that Square and other financial-technology companies are being allowed to compete with banks without being subject to the same level of regulatory supervision.
The new business hasn’t been publicly unveiled. Steve Moser, an iOS developer, discovered the code and shared the details with Bloomberg News. The company calls the new products “Square Checking” and “Square Savings,” according to the code.
“Our bank, Square Financial Services, began operations in March,” Square said in a statement. “We’ve long said its purpose will be to offer business loan and deposit products.”
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group