Square Moves Further into Banking
11 de Octubre, 2018
Tiempo estimado de lectura: 2 minutos
Square Installments will allow customers of its small-business clients to take out a point-of-sale (POS) loan from Square to pay for a product.
Square funds the loans from its own balance sheet, and customers pay the money back in installments, with the merchant receiving the full payment right away. Loans range from $250 to $10,000, and customers can pay them back over a period of three, six, or 12 months. Consumers apply online through a short form and receive a decision in real time.
Square Installments is likely to see high uptake among its merchants’ customers. Eighty-four percent of consumers want flexibility when paying for large purchases, with 77% believing that financing options help them to better manage their finances, according to a survey from Square cited by CNBC. Additionally, the company says it processes 36 million transactions a year larger than $250, suggesting there is considerable demand for this offering. Given that Square already works with many businesses, providing POS loans seems like a natural next step, as it has a huge base of merchants that it can offer Installments to.
This push seems to be in line with Square’s broader aim of offering more financial services. While the company withdrew its banking license application in July, it did reveal that it has plans to reapply at a later stage, suggesting that Square still wants to become a bank in the future. Moving into consumer lending first seems like a wise move, as this makes consumers familiar with its offerings, and increases the likelihood they will opt to bank with the startup once it rolls out those services.
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