Square reveals new debit card for small business
On Thursday, Square Inc. announced a new debit card for small business owners, a feature that enables the fintech company to participate in the finance of payment transactions.
With Square Card, which is free to acquire and use, business owners will be able to use Square
SQ, + 4.51%
balances immediately in stores and online. Previously, those who used Square for payment processing had to wait several days for the money to be transferred to the bank's accounts, otherwise they could pay a small fee for immediate access to their money.
Square earns transaction fees at the time the sellers make their purchases with the card.
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Alyssa Henry, Squares Sales Manager, said in a media talk earlier this week that she expects the card to prove useful with cash flow management, a great pain point for sellers. "The company gave the example of a man who manages a roof business and can immediately purchase supplies for a project as soon as he receives payment from the customer.
Henry also discussed how many small business owners collaborated with personal and business expenses, which can make it difficult to Determine the Profitability of a Business Square Card wants tools that allow business owners to classify their various expenses as either business or personal.
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Square will give cardholders 2.75% discount when using Mastercard Inc. marked cards to purchase items from another Square seller, a nod to the standard payment fee that sellers have been informed by Square.
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The company is no stranger to offering debit payments tea debit products, after launching the consumer-focused cash card in 201[ads1]7. Consumers don & # 39; Don't pay to use the credit card, but Square generates revenue from it via transaction fee.
Instinct analyst Dan Dolev wrote to clients in a November note that the prepaid card is the fourth largest revenue component in the software and service segment of the city, based on the latest conversation with the company's investor relations team. The various software and service components together are expected to have introduced $ 253 million in 2018, according to FactSet estimates. Square says in its second quarter investor letter that Cash App customers spent $ 250 million with the card in June, almost tripled the amount spent in December 2017.
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The new business-oriented square card restricts cardholders to using only their square balances; The users cannot add money to the card, which is not the FDIC insured. Square works on Ohio-based Sutton Bank to enable ATM access via the card.
Square shares increase 4.7% in Thursday trading, and they have increased 23% so far this year, compared to a 4.5% increase for S & P 500
SPX, + 0.25%
at that time.
