Square launched checking and savings accounts for its sellers on July 20, 2021, joining its existing lending service under the Square Banking name. For U.S. merchants, the offer connects access to sales proceeds with tools for spending and setting money aside. Square said checking had no account minimums, overdraft fees or recurring fees. Funds from payments processed through Square would generally be available immediately after processing, although technical issues could delay access. [S1][S2]

A seller could spend the checking balance through a Square Debit Card, send or receive money through the Automated Clearing House network, or pay employees through Square Payroll. Transfers between Square Checking and Square Savings were described as instant and free. The instant-access promise concerns Square-processed payments, not sales processed elsewhere. Mobile check deposits through the Square Point of Sale app were still coming soon. [S1]

Sellers could automatically put a percentage of each Square sale into savings and organize the money into folders for equipment, quarterly taxes or other goals. Square advertised no minimum deposit, balance requirement or account fee, and a 0.5% annual percentage yield. Its footnote promised an APY of 0.50% or more only through December 31, 2021; after that, the applicable rate would be subject to change. An annualized yield is not a promise to add 0.5% to a July deposit by year-end. [S1]

There are two banks behind the bundle. Sutton Bank provides Square Checking; Square’s own Utah-chartered industrial bank, Square Financial Services, issues savings accounts and loans. The Federal Deposit Insurance Corporation approved the latter’s deposit-insurance application in March 2020, when Utah approval was still pending. Square announced on March 1, 2021 that the bank had begun operations, initially underwriting and originating loans for its existing Square Capital service. The July launch added deposit products to that earlier banking operation. [S1][S2][S3]

The design gives an existing Square seller a reason to keep reserves and spending alongside payment processing: money can move automatically into savings and freely between the two accounts. That is a commercial incentive, not evidence of a lower total processing bill. Nor does the absence of account minimums settle eligibility; the launch announcement does not provide a complete account-opening checklist. [S1]

The renamed Square Loans service offered financing that could be repaid through a percentage of daily Square sales. Credit approval was still required. Square said instant access to an approved loan through Square Checking would come later, so that shortcut was not part of the launch-day offer. [S1]

Source documents

  1. Introducing Square Banking, a Suite of Powerful Financial Tools for Small Businesseshttps://squareup.com/us/en/press/introducing-square-banking
  2. Square Financial Services Begins Banking Operationshttps://squareup.com/us/en/press/square-financial-services-begins-banking-operations
  3. FDIC Approves the Deposit Insurance Application for Square Financial Services, Inc., Salt Lake City, Utahhttps://www.fdic.gov/news/press-releases/2020/pr20033.html