Square tests credit card for merchants

The card aimed at providing more financial services to merchants comes amid a slew of competition to serve that clientele

Square announced its credit card partnership with Amex last year so today’s disclosure is a follow-up. The card’s credit limit is set based on the sales a merchant processes with Square, the company said Wednesday. The card rewards sellers with $1 in free processing for every $3 spent using the credit card, a spokesperson said.

In recent years, merchant services providers including Square, Fiserv’s Clover and fintech Toast have sought to expand their offerings to business owners, given these value-added services for merchants can bolster revenue. 

Each of those companies, for example, offer business financing for merchants. Payments and fintech companies are clamoring to provide business owners with more tools and services to manage expenses and business operations, such as payroll. 

In an effort to accommodate the larger businesses it’s chasing, Square said Wednesday it’s introduced loan repayment on a fixed monthly schedule, as opposed to daily repayments, and the option to allow external data to inform loan offer size. That offering is also being tested. 

The spokesperson for the company declined to say how many of its merchant clients are using the card or loan services, or when they’d become more broadly available. “We are continuing to expand eligibility to more Square businesses even in beta,” the spokesperson said in an email. 

Square expanded its roster of banking services for merchants in 2021. Its checking services are “used by hundreds of thousands of sellers monthly,” the company said in the release. Earlier this year, Square raised some of its prices, including the fee it charges merchants for instant or same-day fund transfers to an external bank account.

By Caitlin Mullen on June 28, 2023
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