Square, the startup known for its innovation in the banking sector, has now introduced its own bank.
Square stated on Monday afternoon that its industrial bank, Financial Services, has started its operations (https://squareup.com/us/en/press/square-financial-services-begins-banking-operations). The bank name Financial Services completed its approval process with the Utah Department of Financial Institutions and the FDC.
The bank, headquartered in Salt Lake City, Utah, will offer deposit products and loans. Moreover, it will start with the originating business loans for the existing lending product.
Square is quite popular for its payment system and card reader, used by small businesses. However, it introduced the facilitating credit for the entrepreneurs that have used its products in the previous years.
In a recent statement, the CFO and chairman for Square Financial Services, Amrita Ahuja, stated that providing the banking capability in-house will allow the company to operate in a better manner.
Meanwhile, Financial Services will continue to sell loans to third-party investors. The company also stated that it doesn’t expect the bank to have an impact on the gross profit.
Brandon Soto will be its CFO of the bank, whereas Lewis Goodman will be the CEO.
This fast-growing company, which sells a credit card for startups, with Emigrant Bank as the issuer, stated that it wrote an application to the Utah Department of Financial Institutions (UDF) to establish the Brex Bank. Recently, Karat introduced its own credit card for online creators. (https://rushhourdaily.com/karat-has-just-launched-a-credit-card-for-online-creators/).
Many fintech banks or those providing financial services have spun the bank products, including checking accounts and deposits. Mostly, these provide capital to the customers who won’t get funding on favorable terms on the traditional banking institutions. Moreover, these include entities that might not qualify for the business-building loans from a provider who knows their company well enough, like Square, from both inside and outside.
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