Square Services, the financial services division of Square Inc., recently announced that it has received conditional approval from the Federal Deposit Insurance Corporation (FDIC) for its Industrial Loan Company (ILC) charter application. This approval allows Square to launch a new subsidiary called Square Financial Services, Inc. (SFS) that will offer banking services to businesses.
What is FDICANN?
FDICANN stands for “FDIC Approval with Non-Objection to Change in Control” and is a type of conditional approval that the FDIC grants to companies seeking to establish or acquire an ILC. An ILC is a type of bank that can be owned by a non-financial institution, such as Square. With FDICANN, the FDIC has given its approval to Square’s application for an ILC charter, subject to certain conditions.
Why is FDICANN important for Square?
FDICANN is important for Square because it paves the way for the company to offer banking services to businesses. As an ILC, Square Financial Services will be able to offer loans, deposit accounts, and other banking services to its customers. This will allow Square to expand its offerings beyond its current payment processing and small business lending services.
Benefits of FDICANN for Customers
FDICANN approval is not only important for Square, but it also benefits customers in several ways. Here are some of the benefits that customers can expect from Square Financial Services:
- Increased Access to Banking Services
Square Financial Services will offer banking services to businesses that may not have access to traditional banking services. This includes small businesses and businesses in underserved communities. By offering banking services to these businesses, Square Financial Services can help to promote financial inclusion and provide more businesses with access to the financial tools they need to grow and succeed.
- Streamlined Payments and Banking
Square Financial Services will offer integrated payments and banking services, which will make it easier for businesses to manage their finances. This will allow businesses to streamline their payments and banking processes, which can save time and reduce the risk of errors.
- Faster Access to Funds
Square Financial Services will offer faster access to funds, which can be critical for businesses that need to pay bills, make payroll, or invest in their business. With Square Financial Services, businesses can receive their funds faster than they would with traditional banking services.
- Competitive Rates and Fees
Square Financial Services will offer competitive rates and fees, which can save businesses money. By offering lower fees and rates than traditional banks, Square Financial Services can help businesses to save money and reinvest those savings into their businesses.
What’s Next for Square?
With FDICANN approval, Square can move forward with launching Square Financial Services. However, the company still needs to meet certain conditions set by the FDIC, such as obtaining a certificate of authority from the Utah Department of Financial Institutions. Once these conditions are met, Square Financial Services will be able to launch its banking services.
Square’s move into banking services is part of the company’s larger strategy to become a one-stop-shop for small businesses. By offering payment processing, small business lending, and now banking services, Square can provide a comprehensive suite of financial tools to its customers.
Square Services’ FDICANN approval is an important step forward for the company and its customers. With Square Financial Services, Square will be able to offer banking services to businesses, which can promote financial inclusion and provide businesses with the financial tools they need to grow and succeed. Square’s move into banking services is part of the company’s larger strategy to become a one-stop-shop for small businesses, and FDICANN approval is a crucial piece of that strategy. With FDICANN approval, Square can move forward with launching Square Financial Services and providing its customers with even more ways to manage their finances.