Dive Brief:

• Block’s merchant business unit, Square, said Wednesday that it has begun testing a new credit card for U.S. clients as well as offering additional loan services that are geared toward larger merchants. Square, which offers point-of-sale processing for business owners, previously announced plans for the card.
• The card, which runs on the American Express card network, carries no late fees or annual fees, and provides payment processing credits as a reward for spending made on the card, according to a news release from San Francisco-based digital payments company Block.
• Square has also rolled out new banking services, including early deposit access for business owners using Square’s checking product. That tool offers access to automated clearinghouse deposits from delivery apps and e-commerce marketplaces, a Square spokesperson said.

Dive Insight:

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, offers 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.