Did Square get a bank license or is an existing bank being used behind the scene?
If Square did get a bank license - this would be interesting since now they have all kinds of regulatory requirements to meet.
Square Banking
101–110 of 174 posts
Re: Square Banking
#102> 0.5% APY on savings accounts How insulting, and yet still better than the competition
Low-risk yield doesn't grow on trees. 0.5% is about what a 3 year treasury bond was paying at the beginning of the month (its lower now). Banks dont really need deposits to make loans right now either, since the reserve ratio was changed to 0% last year. So yes, safe, insured deposits in savings accounts dont pay much at the moment. This has less to do with banks being greedy and more to do with current fiscal policy…
In the past I've shopped around and found that you can find personal bank accounts that pay small amounts of interest (~1% in recent years), but business bank accounts wouldn't pay anything. It's nice to see this option, which will hopefully draw some people and simultaneously convince competitors to offer similar products.
Re: Square Banking
#103"Square, Inc. is a financial services company, not a bank. "
Yes, although the checking and savings accounts are both insured up to $250k via FDIC, which is all that matters to some people.
Re: Square Banking
#104Earlier quoted context omitted.
> you never know when your account will get overdrawn How? It’s not that hard to keep track of money in vs money out. I bet most of it is people that don’t understand it takes time for a cheque to clear or people that know an auto payment will overdraw their account but can’t do anything about it (ie: no money). Overdraft fees should be illegal, especially for electronic transactions that get rejected.
Banks used to structure these charges to create overdrafts whenever possible. They made it very difficult for you to see what your actual usable balance is. They also used to be allowed to simply reject the transaction if you didn't have the money and still charge a $36 fee. It was insanity. If your checking balance never reaches close to zero, you wouldn't notice this. I was a teenager in 2010 and definitely got hit…
In 2006 PayPal tried to deduct ~$500 dozens of times in a 48 hour period due to what was obviously a software bug. This resulted in me being overdrawn by around $900. No matter who I spoke to on the phone with Bank of America, nor which branch manager I met with in person, nobody could do anything to help me.
The most I accomplished was having a branch manager agree to waive 1 overdraft fee since I had never overdrafted my account before.
PayPal was even less helpful.
If I enable overdraft protection with my current bank (Wells Fargo) then they will charge me something like $17 to transfer money from my savings account to cover a charge that my primary account wouldn't have enough funds to cover.
This was a good reminder that I need to switch banks. Maybe I can find a good Credit Union in my area.
Re: Square Banking
#105Earlier quoted context omitted.
Yeah, I don't trust these startups handling my money. Not only that, but the bank that they have doing back-end services for them, Sutton Bank, seems like a tiny local bank. Guaranteed their own back-end services aren't in-house. Just no all around to this product.
Square is a public company. Not a startup by any means.
Do they follow the SV "Move fast and break things" mantra?
Re: Square Banking
#106Earlier quoted context omitted.
Yeah but the banking products are provided by a wholly owned subsidiary (savings accounts and loans) and a partner company (checking accounts and debit cards), both of which are banks. The products are indeed offered by banks owned or partnered with Square, but not directly by Square, Inc. itself.
Regardless, if Square were to offer legitimate 2FA I would probably feel more comfortable using their debit card for daily life..Can't seem to find any details regarding this on the FAQ though.
For sure. It's surprising how many legit banks believe that cell phones are appropriate for authentication of large transactions.
Re: Square Banking
#107Earlier quoted context omitted.
You seem to be operating under the assumption that an integrated product will necessarily be cheaper, as opposed to simply more convenient. That's definitely not a necessary result of a combined product offering, but it's interesting to think about.
It's often much cheaper. Take a look at What Microsoft offers with their Office 365 subscription plans or Zoho One.
This topic is pretty well studied and discussed elsewhere, often in the context of antitrust. The Google-able phrase would probably be "bundling vs unbundling" or similar. It's not _always_ the case that a bundled product is cheaper, though, as you point out, often it is.
There are many lawyers representing companies accused of monopolistic behavior who would be on your side of this discussion.
Re: Square Banking
#108It's amazing to me how much of a better product can be created when everything is in one place. It's obvious that when you're charging customers and paying invoices through the same interface, that you'll have more visibility on your cash flow and it'll generally be easier to use, but this goes so much further. The reason those loans are easy is because Square know your history of charging customers. The reason they…
Maybe we can also start moving away from feature-limited Saas offerings that are so damn proud that they focus on One Thing And One Thing Only when customers want just one affordable app to handle all their work and not fifty-eleven ones that become crazy expensive.
oh, so like Apple, but for the B2B space?
Re: Square Banking
#109Earlier quoted context omitted.
Sutton Bank is a real bank with full FDIC insurance. Seems like Square Banking is just a pretty UI on top of that.
This really reminds me of how Simple was actually just a layer on top of BBVA who then ended up closing Simple and now BBVA has merged with another bank and is changing again.
Simple started out as a layer on top of The Bancorp Bank (TBBK), and we intended to support multiple backing accounts before the merger with BBVA.
Re: Square Banking
#110Did Square get a bank license or is an existing bank being used behind the scene? If Square did get a bank license - this would be interesting since now they have all kinds of regulatory requirements to meet.
Square has an ILC: https://squareup.com/us/en/press/square-financial-services-b...