Digital payment company Square has been awarded a conditional license to operate as a bank.
The company, run by Twitter’s CEO Jack Dorsey, now aims to launch Square Financial Services by 2021. It will be established as a Square subsidiary, but will work independently.
Headquartered in Salt Lake City, Utah, Square Financial Services be able to offer small business loans and deposit products for SMBs.
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The approval came from the Federal Deposit Insurance Corp. and a charter approval from Utah Department of Financial Institution.
“FDIC staff found that Square satisfied each of the statutory factors required for approval, subject to certain conditions. One of the conditions would require the proposed bank to maintain levels of capital that are significantly higher than typical FDIC-insured banks,” FDIC Chairman Jelena McWilliams said in a statement.
The leadership team at Square Financial Services will include Lewis Goodwin as its Chief Executive Officer and Brandon Soto as its Chief Financial Officer.
Before Square, Varo Money got approval from FDIC to operate as a bank in recent weeks. While LendingClub made its way into banking by acquiring Radius Bancorp for $185 million.
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