March 28, 2023

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One of the prominent financial payment firms known as Square has announced the launch of the in-house bank. The founder of the platform, Jack Dorsey has revealed that the in-house bank would turn out to be extremely useful and beneficial for the fintech market.

He stated that over the course of years, the fintech markets have become really crowded and packed with investors. The number of people in the fintech markets is constantly rising and is demanding more nimble solutions. This is why the teams have Square has come up with the idea of an in-house bank so the company can run its operations more smoothly in the industry.

It was on Monday, March 1, 2021, when the platform announced that its in-house bank is now operational. Square revealed that they were waiting for the Federal Deposit Insurance Corporation (FDIC) to finish the process of charter approval. The process of charter approval was also under consideration by the Utah Department of Financial Institutions.

The firm has announced that the bank will be governed by Square Inc. itself and will be operating independently as its subsidiary.

Just so you know, Dorsey is also the co-founder and the CEO of the global social media platform “Twitter”.

The firm has revealed that Square Financial Services will be based in Salt Lake City (Utah). The firm will be carrying out the duties of depositing products to sellers and providing business loans. Square Financial Services will be depositing products for sellers who use the point of sale services and other card reading products provided by Square.

During the pandemic, it has become evident that due to the circumstances, people have now become more used to touchless and remote payment services.

This change has been experienced not only on the consumers’ end but also for the companies that have also started making a shift to remote/contactless methods.

It has been observed that fintech firms are constantly increasing the number of services and products that already being offered by traditional banks. However, the bank charters are something completely new that Square has adopted and is determined to offer its users.

If you study the fintech markets, you will see that majority of the fintech firms tend to partner with third-party traditional banks. They acquire their services in order to facilitate their users, which in return benefits the banks as well.

However, this is something completely rare in the fintech industry where a firm has launched its own banking service.

Although PayPal has been considered the leading provider when it comes to fintech solutions, the recent move made by Square is bound to give it an edge over PayPal.

PayPal is still dependent on partnering with traditional banks in order to provide business lending and merchant services to its clients. On the other hand, Square now has its own bank that will be responsible for carrying out the same but in a more precise and authoritative manner.

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