Ever-ambitious financial services company Square (NYSE:SQ) was a stock market champ on Tuesday, with its shares closing almost 6% higher on the fulfillment of one of its big aims: The company now offers banking services.
Square officially launched a new suite of banking services on Tuesday. As per its habit, it's packaging these into a rather prosaic brand name: Square Banking. This comprises two main products, the self-explanatory Square Savings and Square Checking. This pair joins an existing one, Square Loans; no prizes for guessing what this service features.
"By offering essential banking tools that work seamlessly with Square's ecosystem of solutions like payments and Square Payroll, sellers now have a single home for their entire business, gaining a unified view of their payments, account balances, expenditures, and financing options," the company wrote in an email trumpeting its new role as a traditional bank.
Since Square has always had a core focus on the small businesses that use its point-of-sale terminal and the growing number of associated services available with it, Square Banking is targeted at such enterprises. The annual percentage yield of 0.5% should encourage saving and budgeting, while users get a financial break with no minimum deposit or balance requirements, and no account fees.
Square Banking is sure to be popular with the company's customer base, and it fits in beautifully with the continually expanding ecosystem of services. This is unambiguously a win for both the company and its investors.