Legging into banking, Square introduces debit card for businesses
- Consumers have had access to a Square debit card.
- Now, merchants can spend their cash without first moving it to a bank account.
Square merchants no longer need to move cash that accumulates from sales into a bank account in order to spend it. With Square’s new debit card, merchants can spend their business’ money using plastic anywhere Mastercard debit cards are accepted.
Why this is important: This product takes the payments company one step closer to providing banking services. Remember, Square re-applied for a banking license in December 2018. Without a banking license, the money that accrues in these accounts isn’t really ‘deposits’ in the classic sense and aren’t insured by the FDIC. With easy ways to move money in and out of Square, merchants can now pretty much live within the company’s ecosystem.
Payments is heating up: Square’s growing influence in the business payments space is a concern for incumbents and may have been a driving force behind Fiserv’s acquisition of First Data this week. First Data has its own cloud payments service, Clover, that competes directly with Square.
“The Square card extends our ecosystem by offering instant deposit,” Alyssa Henry, seller lead at Square said on a call with reporters. “You don’t need to transfer to a bank account, which is one less thing for a seller to have to think about.”