Square Applies Once Again for Banking License
Square is making another attempt to enter the banking world. The payment processor is resubmitting the application for a banking license, according to a company statement on Wednesday.
Square aims to earn an industrial loan company license from the FDIC. This gives non-traditional financial service providers the ability to collect government-insured deposits. If the application is approved, the bank would be chartered in Utah.
The company originally applied for a bank charter in September 2017, but they retracted the application in July 2018. Since then, the company has worked closely with regulators to update their application with additional documentation about the proposed bank’s infrastructure and chief officers.
The new division would be called Square Financial Services, with a focus on deposits and small business lending.
The idea behind Square Financial Services came from the popularity of the company’s Cash App. Many users have adapted the app’s direct deposit and money transfer features to function like a traditional bank account. Users can withdraw money using a Cash Card or use the funds to buy digital currency, shop online, etc.
Square’s CEO Jack Dorsey said, “We are reaching an audience that is under-served and even to the point of unbanked, which wasn’t a stated goal but it’s something we love and want to lean into more.”