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Square, the mobile payment company, has expanded its services to include banking operations through its subsidiary, Square Financial Services. The industrial bank has officially begun operations after receiving approval from the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions [1][2]. The move is part of Square’s strategy to “operate more nimbly” and offer a wider range of financial services to its customers [1].
What is Square Financial Services?
Square Financial Services is a subsidiary of Square, Inc. that offers banking services to small businesses. The industrial bank is based in Salt Lake City, Utah, and is regulated by the FDIC and the Utah Department of Financial Institutions [2]. The bank’s services include loans and deposit accounts for small businesses [4]. By offering banking services, Square aims to provide a more comprehensive financial ecosystem for its customers.
The Approval Process
The approval process for Square Financial Services was lengthy and involved. The company had to go through a rigorous application process with the FDIC and the Utah Department of Financial Institutions [3]. The process included a review of Square’s financial stability, risk management practices, and compliance with banking regulations. After completing the process, Square received approval to operate as an industrial bank [2].
The Benefits of Square Financial Services
The launch of Square Financial Services offers several benefits to small businesses. By offering loans and deposit accounts, the bank provides access to capital that can help businesses grow and expand. Additionally, the bank’s services are integrated with Square’s existing payment processing platform, making it easier for businesses to manage their finances in one place [4]. The bank also offers competitive interest rates on its deposit accounts, providing businesses with a way to earn interest on their cash reserves [1].
The Future of Square Financial Services
The launch of Square Financial Services is just the beginning of the company’s expansion into banking services. Square has stated that it plans to offer additional financial services in the future, including checking accounts and other lending products [1]. The move is part of Square’s broader strategy to become a one-stop-shop for small businesses’ financial needs.
Conclusion
Square Financial Services’ launch as an industrial bank is a significant step for the company and its customers. By offering banking services, Square can provide a more comprehensive financial ecosystem for small businesses. The bank’s approval process was rigorous but ultimately successful, allowing Square to operate as an industrial bank. With plans to expand its financial services in the future, Square is well-positioned to become a major player in the small business banking space.
