Square Inc announced its entry into banking operations after completing the approval process by the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions, bringing banking capabilities inhouse. The operations will run under its independently governed subsidiary, Square Financial Services.
Company CFO and Square Financial Services Board chair Amrita Ahuja says the inhouse banking capabilities will help Square operate with more agility as the company looks forward to expanding financial services to more businesses.
Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved
Amrit Ahuja
Square Financial Services’ primary purposes will be to offer business loans and deposit products, becoming the primary provider of financing for square sellers in the United States.
According to a blog post by the company, Square will continue to sell loans to third party investors and limit their balance sheet exposure.
“Square Financial Services will continue to sell loans to third-party investors and limit balance sheet exposure. We do not expect the bank to have a material impact on Square’s consolidated balance sheet, total net revenue, gross profit, or Adjusted EBITDA in 2021.”
READ ALSO: Square Purchases 3,000 Bitcoins Worth $170 million