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Report: Square to Offer Business Checking, Savings Accounts

By Eric Volkman - May 24, 2021 at 6:56PM

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Apparently, the fintech is about to take another step onto the territory of traditional lenders.

Square (SQ -3.21%) is continuing its relentless march toward the heart of the U.S. finance industry. A report published Monday by Bloomberg said that the popular fintech company is apparently planning to roll out business checking and savings accounts.

According to the report, hidden code in the company's latest update to its app for Apple devices refers to both kinds of accounts. The code also indicates that the checking accounts will link to Square's current business debit card offering. Bloomberg added that Square doesn't seem to be planning monthly service fees for the new accounts, and shouldn't impose charges related to overdrafts and minimum balances.

Square point of sale terminal in use.

A Square point-of-service terminal. Image source: Square.

Somewhat unimaginatively, the two offerings will be known respectively as Square Checking and Square Savings.

Business checking and savings accounts have been dominated by traditional banks for many years. But upstart Square has, in its recent past, encroached on that territory. In March 2020, the company received both federal and Utah government approval to open a bank in the state's capital, Salt Lake City. That lender, Square Financial Services, launched operations in March of this year.

In response to Bloomberg's story, Square stated, "We've long said [Square Financial Services'] purpose will be to offer business loan and deposit products." It didn't directly confirm or deny that it is launching business checking and savings accounts.

Part of Square's appeal is its success in tying together a rapidly expanding 21st-century ecosystem of offerings for merchants with elements of traditional small-business finance. In the likely case that Bloomberg's reporting is accurate, it would bolster the investment case for Square as a cutting-edge financial stock.

Investors seem to agree. On Monday, they bid Square shares up by 5.5%, well outpacing the 1% gain of the S&P 500 index. 

Eric Volkman owns shares of Apple. The Motley Fool owns shares of and recommends Apple and Square. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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