Square Financial Services is off the mark as a bank after it wrapped up a charter approval process.

Square Inc (NYSE: SQ) now has its own operational banking arm. Subsidiary and industrial bank Square Financial Services has opened for business after it completed the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions. (PYMNTS.com)

In March last year, the FDIC conditionally approved the application by Square Financial Services, a subsidiary of Square Inc., for deposit insurance. The Utah Department of Financial Institutions also granted charter approval to Square Financial. At the time, Square said it will offer both small business loans and deposit services such as checking and savings accounts out of Utah.

The new bank will be “nimble”

“Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved,” said Amrita Ahuja, Square, Inc. Chief Financial Officer and Executive Chairwoman of the board of directors for Square Financial Services.

In a Monday announcement Square said its new bank will primarily offer business loan and deposit products. It will begin with underwriting and originating business loans for Square Capital’s existing lending product.

Square Capital is a wholly-owned subsidiary of Square focused on providing business tools and financing for small businesses and sellers.

Square Capital pays 58% of its loans to businesses owned by women and 35% to minority-owned businesses. For traditional lenders, these percentages are only 17% and 27% respectively.

The payments giant said in its release that, in the future, Square Financial Services will be the primary provider of financing for Square sellers across the U.S.

Square earnings – latest quarter

Square reported adjusted EPS for Q4 FY 2020 that beat analysts’ forecasts.

However, both revenue and gross payment volume narrowly missed analyst expectations.

All three financial metrics were higher compared to the same three-month period a year ago.

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