Square has decided against making its own credit card, according to Fast Company. The decision not to move forward comes after CEO Jack Dorsey and the company's other executives initially expressed excitement over the idea. A Square-branded card would've allowed customers to link the plastic with a checking account and, according to the report, track their spending activity with "simple digital receipts" and notifications rather than traditional banking statements.
And while it sounds like the card — which reportedly featured an all-black design free of any logos — was conceived as a debit card alternative, Square was also looking into building rewards programs resembling those that typically come alongside credit cards. The product, which made it as far as prototype testing among company employees, was seen as the perfect complement to Square's signature credit card reader. Jack Dorsey's mobile payments startup would own "both sides of the counter," as one former employee told Fast Company.
A Square card could have soured the company's relationship with Visa and MasterCard
But once Dorsey and Co. took a hard look at the potential downsides of a Square card, their plan came to a screeching halt. The ultimate goal, if the product had been released, obviously would've been to someday convince consumers to swap their bank-issued cards for Square's own solution. But those lofty ambitions risked creating a huge divide between the company and financial partners like Visa and MasterCard — who play a crucial role in Square's day-to-day operations. Making the move to plastic also could have opened Square up to the same strict regulations that proper banks and credit card companies must adhere to. The company hasn't officially admitted that the credit card idea was in play, but has confirmed to Fast Company that it won't be releasing a card anytime soon.
Even without its own credit card, Square still has plenty of products and services on its plate. Many would argue those add up to a few too many projects, especially when some, like Square Wallet, have fallen flat with consumers. But Square needs to find a revenue stream more substantial than the tiny fees it collects whenever customers use the company's small, plastic card reader. Apparently Jack Dorsey realized another piece of plastic wasn't the answer.