By Anna Irrera
(Reuters) – Square Inc, the company run by Twitter Inc CEO Jack Dorsey, is launching banking services for small businesses, as it continues to expand beyond payment processing.
Square Banking will offer small businesses savings and chequing accounts, as well as its existing loan offering which has been renamed Square Loans, the San Francisco-based company said on Tuesday.
Square Checking will not have an account minimum, overdraft fee, or recurring charge, and savings accounts will offer an annual return of 0.5% on deposits.
Square hopes its new checking and savings accounts, which build on its debit card offering, will be attractive to small businesses that have struggled to access more traditional banking services, said Christina Riechers, product manager for Square Banking.
“There is no monthly fee, so we believe this has great potential in getting people to engage in more formal business banking,” Riechers said in an interview.
Deposits collected from small businesses will be loaned through Square Loans, she said.
The new services follow the launch of the company’s industrial bank, Square Financial Services, which began operations in March after completing the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Department of Utah financial institutions.
The industrial bank is part of Square’s effort to expand its revenue stream beyond facilitating card payments for small businesses.
The mainstream business of the Cash App business is booming, with first quarter non-bitcoin revenue investing 139% year on year to reach $ 529 million.
While initially only small business deposits will be consolidated under the Square Financial Services umbrella, over time the company will look to make the bank work across its full range of products and services, a spokesperson said. word.
The renowned lending business will continue to offer loans to sellers based on their transaction data.
The company, formerly known as Square Capital, saw its revenues plummet during the pandemic as the company suspended its main small business loan offering to instead focus on offering funded Paycheck Protection Program loans. by the government.
Since the loan restart, the company claims to have seen volumes recover.
(Reporting by Anna Irrera; editing by Jason Neely)