Square is launching a new free banking service on Tuesday that connects to the payment and point-of-sale products the company already offers to small businesses. Square Banking combines checking accounts, savings accounts, and Square’s existing small business loans (now called Square Loans) into a package that the company claims is both fair and accessible.
In terms of features, Square’s new savings account can automatically set aside money from every sale made on Square’s platform. Square Savings will also let users create custom folders for saving toward specific goals. Funds in a Square Checking account will be instantly available to use for payroll and other payments using a Square debit card, and Square says its accounts have no account minimums, overdraft fees, or recurring fees.
A Square closed loop
Square says Square Loans are offered based on a small business owner’s previous sales history through its platform rather than their credit score. The company hasn’t made any dramatic changes to its loan service (formerly Square Capital), but users will be able to pay off their loan with a percentage of each sale on Square, and Square says in the future loans will be available immediately in a Square Checking account once approved.
Given the banking features already baked into Square’s consumer-facing Cash app, it makes sense it would go all-out for its original customer base. The quasi-closed loop of taking payments through Square, keeping money in a Square account, and then spending money with a Square debit card also keep things simple for business owners, provided they’re comfortable putting all their eggs in one basket.
You can sign up your small business for a free Square Banking account today.