Square Inc. formally announced a new debit card for small-business owners. Offering this card enables the fintech company to strengthen its presence in the payment transactions industry. Likewise, the debit card is a new source of revenue for Square as it continues to build on the success of consumer-focused Cash app.
Business owners can obtain the Square Card for free and allows cardholders to spend their Square balances straightaway in stores and online. Previously, fund transfers to bank accounts took days before customers could use their Square cards for payment processing.
Last month, Alyssa Henry who is Square’s seller lead said during a media briefing that she expects the card to prove helpful with cash-flow management. As an example, Square said a man tasked to manage a roofing-supply business is able to buy supplies for a project without delay once payment from the customer is received.
Henry also discussed how many small-business owners can now mix personal and business expenses. Before it was impossible to do that as it was confusing to determine profitability. But with the tools embedded in the Square Card, business owners can now classify various expenses accordingly.
Cardholders will also be given a 2.75% discount whenever they use Square’s MasterCard Inc.-branded cards to purchase items from another Square seller. Sellers have long been familiar with the standard payment-processing fee of Square.
The store-valued debit products are nothing new to Square since the 2017 launching of the consumer-focused Cash card. While there are no usage fees charged to Cash cardholders, Square earns from the transaction fees.
There are limitations to the card however. Cardholders can only spend their Square balances and are not allowed to add money to the card because they are not insured by the FDIC. Square is currently in talks with Ohio-based Sutton Bank on the possibility of ATM access through the card.