Square Banking Review: Financial Services & Business Checking

Pros

• $0 opening deposit
• Instant availability of funds from Square transactions
• Automatic transfers to customizable savings folders
• Mobile check deposit
• Linked services support sales, savings, and loans

Cons

• ATM withdrawal limits
• No cash deposits
• Deposit and spend caps

Services Offered By Square Banking

Square Banking is the latest small business tool for Square users who need business checking and savings options. Now, a small business can use Square banking services for all its financial needs from sales to savings. Square Banking includes Square Checking, Square Savings, and Square Loans and it works with all the small business management tools in the Square universe. Is Square Banking right for your small business? Let’s find out.

For anyone unfamiliar with Square and wondering “What is Square?” Square offers a wide array of financial tools and resources to small businesses. Those who already know and use Square’s software products, as well as those leaning toward Square POS, are not likely to find much of a downside to signing up for Square Banking, especially if you’re not already set up with a business bank account. (And, by the way, if you’re wondering if you need a business bank account, the answer most likely is yes, you do.)

Square Banking includes the following services:

• Credit card sales processing
• Business checking account
• Mobile check deposit
• Debit card
• Business savings account
• Business loans
• Bill pay
• Free transfers
• Integrations with Square products like POS

Square Banking Rewards & Perks

Square Banking does not offer much in the way of special rewards, beyond the convenience of using business banking services that encompass all your financial needs, from credit card processing to checking and savings and even loans, with seamless transfers between all those elements. However, for merchants already using Square’s POS and other business and time-management functions, that’s a notable perk. Even better, Square merchants who use Square for business banking will have almost instantaneous access to funds from sales. For these reasons, we rate Square banking “Good” in terms of rewards and perks.

Square Banking is currently advertising an APY of 0.5% or more (though that rate is listed online as expired at the end of 2021, it’s still valid as far as we can tell). Square Banking also includes a debit card, and vendors who use the Square card will receive a 2.75% instant discount on purchases made from other Square sellers.

Compared to other business banking services, Square Banking offers some nice perks that small business owners should appreciate:

• No account minimums
• Instant account setup
• $0 minimum deposit
• No credit checks
• Funds from Square sales instantly available
• Automated transfers to high-yield savings
• 24/7 access to funds
• eWallet options including Apple Pay and Google Pay
• View sales and savings in POS and Dashboard
• Free instant transfers to internal or external accounts
• Eligibility for Square Loans (up to $250,000)

Users should be aware that Square is a financial services company, not a bank. Banking services are provided by various FDIC members, including Sutton Bank.

If you are looking for a small business banking option with better rewards, check out the best high-yield business savings accounts.

Square Banking Pricing & Fees

Square Bank users can avoid most fees commonly associated with business banking. When you use Square Checking, you can cross these off the list:

• No monthly service or maintenance fees
• No minimum balance fees
• No transfer fees, except for instant transfers (1.5%)
• No fees for bill pay
• No foreign transaction fees
• No ATM fees, though the ATM owner may charge you
• No overdraft fees, because transactions that would result in an overdraft will not be processed

Square Banking Eligibility Requirements

Eligibility Requirements

Square Banking is available to Square users aged 18+. It’s free to sign up for a Square account, and signing up takes only two minutes, according to Square. You can set up a Square checking account that includes a debit card through your Square POS or Dashboard, by verifying your information and personalizing your business debit card.

Square savings is available only to Square customers based in the United States. Furthermore, eligible businesses must be sole proprietorships, rather than LLCs or corporations. Although Square intends to expand that and offer Square Banking to more types of businesses, there is no date attached to those plans.

Other than those limitations, all Square users are eligible for Square Banking services. You won’t need to worry about a credit check, income verification, or a hard pull that can affect your credit rating.

Time It Takes To Receive Funds

Funds generally will be available almost immediately after you make a sale via Square. If you use the Square Card, the money from your own Square sales will be available via debit immediately. You can use the Square Debit Card at an ATM without incurring any fees from Square, although the ATM owner may charge you a service fee. ATM withdrawals are limited to $500 per transaction, $1,000 per day and per week, and $2,000 per month.

Fast Square Loan Approval

If you decide to apply for credit via a Square loan, you can expect a speedy process there, too, with almost instant approval. Applying for a Square loan does not involve a traditional application process with a credit check that might affect your credit score. Square loan offers are based on factors such as your payment processing volume, account history, and payment frequency. Just as users can set up automatic transfers to savings, loan repayment is automatically set to a percentage of your daily sales processed through Square. So your repayment amount will fluctuate based on your daily sales.

Square Banking Features

Square Banking’s most attractive feature is that it exists right in the middle of your small business financial universe. In fact, Square Banking may be the final link for businesses that already use Square for transaction processing. Whether you manage your business through the Square POS app or use the Square online dashboard, when you add Square Banking to the mix you can control all your small business finance needs, from sales to saving to spending, from one place.

Here’s how that plays out:

• Transaction Reports: Users can download transaction reports directly from the Square POS or online dashboard. That will help you with balancing your books, doing your taxes, and knowing how much cash you have available, with no third-party integrations needed.
• Instant Access To Cash: Transactions processed on your Square merchant account are transferred instantly to your linked Square Checking account. That means you can access your money faster than if you first had to transfer it to a bank account. Compare that to funds processed via Square and transferred to an external account, which can take up to two business days, or longer if your transfer falls on the wrong side of the transfer deadline or on Friday or Saturday. If your business operates with a tight cash flow, Square Banking could be a lifesaver.
• Easy Access To Funds: Square’s debit card works with both the Apple Pay and Google Pay digital wallets. Setting the card up in a digital wallet can allow you to whip out your phone or compatible smartwatch at NFC-enabled payment terminals or more seamlessly pay for in-app or online purchases. You can also use the Square debit card at ATMs, although your withdrawals will be limited to $500 per transaction, $1,000 per day and per week, and $2,000 per month. Square does not charge an ATM fee, although the owner of the ATM you use may do so.
• International Use: Although Square Banking is available only to US-based merchants, the Square debit card can be used internationally wherever MasterCard is accepted. Square does not charge foreign transaction fees.
• Automatic Transfers: Move your money around the Square Banking system with no limits or fees. Funds from Square sales are automatically transferred to your Square Checking account. From there, you can access the cash using your debit card, move money to savings, or pay off your Square Loan, if you have one. You also can send money to an external linked account, in one to three business days (for free) or instantly (for a fee). The Square Bank includes account and routing numbers, like a traditional bank, that you can use to pay bills and add funds from an external account, with no fees. It’s important to note that while you can make transfers from an internal account, you cannot deposit cash or checks into your Square Checking account.
• Targeted Savings: Set up automated savings, and you can choose to move a percentage of each day’s Square sales revenue into a dedicated savings folder within your Square Savings account. That’s a boon to small business owners who may find it difficult to set aside money for taxes, emergency use, or business investments. Setting up automatic transfers means you can separate those needs from your day-to-day operating expenses and easily save for multiple priorities that your business will need as you grow.
• Access To Credit: Square Banking services include access to small business loans from $300-$250,000. Loan offers are based on your card sales through Square and don’t include ongoing interest, just a flat fee. You can prepay the loan without penalty, but doing so will not decrease the total amount owed. Repayment happens automatically with a percentage of daily card sales through Square, so the amount you pay can vary with the pace of your sales. To stay current on the loan, you must repay a minimum of 1/18 of the initial balance every 60 days. You don’t even have to apply; you’ll receive loan offers automatically and immediate approval, with no lengthy application or credit check.
• Mobile Check Deposit: Use your smartphone to open the Square POS app to deposit checks. Checks may be made out to the owner’s name or the business name, and checks must be endorsed.

One feature that matters to people working with limited amounts of capital is how quickly you’ll be able to access funding. Square does a good job in that area, with funds from Square sales available immediately for use.

Here’s a quick rundown of funds availability for Square banking customers:

Looking For Additional Features? Here are Square’s Other Business Services

Square offers much more than banking services, of course. Here are some of the other tools Square offers to small business owners:

• Square POS
• Square Payroll
• Square Online
• Square
• Square Loyalty
• Square Marketing
• Square Inventory
• Square Invoices
• Square Capital
• Square Appointments
• Square Estimates
• Square Customer Directory

Square Banking Customer Service

Square Banking does not include dedicated customer support for users needing a little extra help. However, users can access support through the usual Square support channels, which are usually rated fairly well by users. One potential immediate need can be addressed with a nifty fix that will come in handy for anyone who loses track of their Square debit card: You can temporarily deactivate your card from right within the Square app.

For any other banking support needed, contact Square via these channels:

• Phone: Contact a live rep between 6 AM and 6 PM Pacific time, Monday through Friday.
• Email: If you have a Square account, you can sign in and send a detailed email message.
• Live Chat: A chatbot guides you through a series of questions, narrowing your topic
• Community Forum: Check out the self-help resources on the Square Seller Community.
• Social Media: Square maintains a Twitter support page for technical questions and responds to messages on its Facebook page.

Square Banking Reviews & Customer Complaints

Launched only in July 2021, Square Banking still is a relatively new financial product, and there aren’t a lot of user reviews available at this point. Overall, Square has a Better Business Bureau (BBB) rating of A+ with 1,121 complaints closed over the past 12 months. A quick review of complaints to BBB over the lifespan of Square Banking did reveal a few banking-specific complaints. It appears that Square responds to BBB complaints and the majority of them have been resolved to customers’ satisfaction.

With so few data points to work with, let’s consider users’ overall satisfaction with Square and try and glean some clues. With 1,394 ratings on G2Crowd, Square has a solid 4.4/5 ranking. On Trustpilot, Square has a 4.5/5 rating, with 3,449 reviews. We will be checking back to find more banking-specific reviews of Square’s services we can use to update this review.

What Users Like:

• Easy to use
• Good customer support
• Quick access to cash
• Useful tools for growing businesses
• Convenient services

What Users Dislike:

• Locked accounts
• Fraudulent accounts opened
• Complicated chargebacks
• Unhelpful self-help resources
• Hard to reach live support

Is Square Banking Safe?

While Square is a financial service company and not a bank, Square Banking services are provided by FDIC Members, including Sutton Bank and Square Financial Services, Inc. All Square Banking accounts are FDIC-insured up to $250,000.

As a parent company, Square is secure. Square monitors payments for fraud and maintains a team of fraud experts. Square is PCI-compliant and handles data security for its users. Square hardware and software are engineered with safety in mind. Payments are encrypted to protect them, with no setup required by merchants. Users can set up two-step verification to add security to their Square account, set user permissions to control access to their account, and receive feedback from Square regarding password and account security.

Final Verdict: Is Square Banking Worth It?

If you currently use Square for your small business payment processing, then Square Banking could be an appealing option. It’s one easy way to separate your business and personal finances, which is something many small business owners struggle with. Compared to the more complicated process of opening a traditional business bank account, Square provides an easy alternative. And with no credit check, no proof of income, no minimum balance, and no fees, Square Banking is undoubtedly an attractive alternative to traditional business banking.

Square Banking services can help small business owners manage their finances by giving instant access to funds from sales made using Square’s payment processing. And Square Banking includes easy features that let you set savings goals and meet them almost effortlessly.

We see some drawbacks with Square Banking, such as the inability to deposit cash into your Square accounts. If you’re one of the many merchants who take payment overwhelmingly via credit or debit card, that may not be a noteworthy shortcoming. And if you’ve looked into opening a business banking account but are holding back because you don’t have all the required documentation or a verifiable income yet, Square Banking could be the all-in-one solution you need.

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The Merchant Maverick Seal of Approval 🏆

Square Business Banking	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Square Business Banking for yourself.

The Merchant Maverick Seal of Approval 🏆

Square Business Banking	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Square Business Banking for yourself.

Sources