Digital payments company Square announced it will launch its small business bank next year. Square’s application for the bank, Square Financial Services, has been conditionally approved for a bank charter.
Square Financial Services will operate as an independent subsidiary of Square. The new bank’s primary objectives will be to offer small business loans for Square Capital’s commercial lending business, and to offer deposit products.
“We appreciate the FDIC’s thoughtful approach to our application, and their recognition that Square Capital is uniquely positioned to build a bridge between the financial system and the underserved,” said Jacqueline Reses, Square Capital Lead and Executive Chairwoman of the board of directors for Square Financial Services. “We’re now focused on the work ahead to buildout Square Financial Services and open our bank to small business customers.”
In preparation for the launch of the new bank, Square has begun the hiring process to staff its new bank headquarters, which will be located in Salt Lake City, Utah. Square Financial Services CEO Lewis Goodwin and CFO Brandon Soto have been charged to lead the bank’s executive team.
This comes just one month after P2P lending company Lending Club announced plans to purchase Radius Bank. The move offers Lending Club users a full suite of banking tools. Square also follows in the footsteps of Varo Money, which received approval for deposit insurance from the FDIC in February.