The Twitter co-founder and Square CEO has set his sights on launching an SME bank next year.
Square, US payment provider of which Twitter’s Jack Dorsey is the founder and CEO, has gained permission from the Federal Deposit Insurance Corporation Board to become a deposit-taking bank via an Industrial Loan Company licence.
The company will launch Square Financial Services which will be based in Salt Lake City, Utah after also gaining approval from The Utah Department of Financial institutions for the charter.
According to a blog post on the company’s website, Square Financial Services will operate independently, as a direct subsidiary of Square Inc.
The bank will be focussed on offering small businesses loans for Square Capital’s commercial lending business and offer other deposit services as well.
Jacqueline Reses, Square Capital Lead and executive chairwoman of the board of directors for Square Financial Services, said: “We appreciate the FDIC’s thoughtful approach to our application and their recognition that Square Capital is uniquely positioned to build a bridge between the financial system and the underserved.”
“We’re now focused on the work ahead to buildout Square Financial Services and open our bank to small business customers.”
Simon Taylor, head of ventures at financial services consultancy firm 11:FS, said: "Square has integrated deep into SME stock and supply chain systems, often providing the software and automation.
“Its data services are arguably much more valuable than their payments acquiring business. That data makes for a super powerful ability to model risk. Especially in this market.”
The company has appointed industry veterans Lewis Goodwin and Brandon Soto as CEO and CFO respectively.
Both Goodwin and Soto are certified public accountants in Utah and have previously worked in a series of senior financial roles at banks including JPMorgan Chase, Chrysler Financial Bank and Toyota Savings Bank.