A recent update to Square’s iOS app code reportedly reflected forthcoming business checking and savings accounts, according to Bloomberg. Square Checking and Square Savings, which have no planned launch date, would let customers bank with Square without monthly service charges or minimum balance and overdraft fees, enable funds received through Square-based sales to be accessible immediately, and offer a 0.5% interest rate through this year. Square did not confirm the reporting but noted that its bank, which launched in March after it was approved for a charter in 2020, always intended to support lending and deposit products.
Launching formal bank accounts would improve Square’s competitive positioning as providers race to build one-stop shops:
This could help the provider execute on its growth plans. In a 2020 investor presentation, Square estimated its seller ecosystem market opportunity was worth $100 million—and noted it has penetrated less than 3% of that. With an estimated 20 million merchants in its purview, Square can use its ecosystem to reach its target audience, which includes sellers earning more than $250,000 in annualized volume. Services like the rumored bank accounts could appeal to these sellers, which have taken to Square's other financial offerings, like lending, and tighten relationships with existing merchants—and bring in new customers. This could help the firm continue to boost both overall volume and revenues from profit-driving sectors, accelerating overall growth.