Increasing digitization among the 32 million US small businesses is changing the competitive landscape and forcing banks, acquirers, and fintechs to invest in next-generation features. These features range from payments and value-added services to outreach.

Payments Ecosystem: POS hardware, POS software, and gateway providers are working to become one-stop shops for merchants. Offering simple, robust access to front- and back-end solutions across industries lets them better serve merchants demanding integrated solutions.

The American Express-owned lender added a high-yield checking account for small and medium-sized businesses, giving it an opportunity to cross-sell lending products and deposit accounts.

Service providers are using their existing relationships with small businesses to move into financial services, taking on financial institutions by offering solutions like lending and bank accounts that are powered by partnerships, digital banking developments, and even in-house banks.

An iOS app update reportedly contains language about two forthcoming bank accounts from Square—which, if true, put it ahead of the competition.

Square's new SMB offerings could tee up deposit product launch, and its merchant network could help it emerge as a significant threat to the likes of JPMorgan and Bank of America.