Entrepreneurs and business owners are constantly seeking innovative solutions to streamline their operations and enhance their financial efficiency. This is because managing your business finances efficiently will result in more value for time, simplicity, and adaptability. Over the years, tons of payment methods have popped up and the Square Business Account is one of them. This guide is a full review of the Square business account, including its benefits as well as how it can empower your business and elevate your financial operations to a whole new level.
Overview of Square Business Account
The Square Business account is specifically designed for small businesses that use the Square payment system. With this checking account, small businesses can effortlessly manage their cash flow and get access to business loans. Square business checking is intricately linked to the revenue generated through Square payment services. Most of the time, small business owners look to Square as a way to improve and expand on the current, unfair practices in financial services, such as charges and application processes that are not needed or are out of date. Square accounts, whether they’re checking or savings accounts, are FDIC-insured. The first is up to $250K and the second is up to $2.5M.
Moreover, a Square business account is provided to Square users at no cost, without any monthly maintenance fee, minimum balance requirement, or overdraft fee. It facilitates instant transfers of earnings to the Square business account without any further charges. Again, the business account comes in four different types. These are the business checking account, the business savings account, the business credit card account, and lastly, the merchant services account.
Types of Square Business Account
The following are the four types of Square business accounts:
#1. The Business Checking Account
A business checking account allows you to accept payments in your company’s name and spend money through business debit cards, checks, or wire transfers. This is the account where you would manage payroll and other operational expenses.
#2. The Business Savings Account
Most small businesses love to have a separate account for savings. That way, they can easily raise money for one or two projects. The business savings account allows you to safely save and earn cool interest.
#3. The Business Credit Card Account
This works like every other credit card account. The business credit card account allows you and other authorized users to make credit purchases and pay them off later.
#4. The Merchant Services Account
A merchant services account allows you to accept credit and debit card transactions from customers in a secure manner, with purchase protection and personal information security.
Square Business Account Eligibility
To initiate the process of opening a Square business account, you must fulfill some prerequisites. If an individual is currently selling products or services through Square, they can promptly acquire a business checking account. Alternatively, it is necessary to initially become a seller on Square.
Eligibility for a Square Business Account
To meet the requirements for the Square business checking account, your business will have to fulfill the following criteria:
- You must be based in the United States
- Provide your social security number (or ITIN), date of birth, full name, and a US mailing address.
- Have a legitimate United States address and accurate contact information.
- Be registered with the Internal Revenue Service (IRS).
- Pass identity verification and Know Your Customer (KYC) requirements
Square Business Account Features
The Square business checking account comes with several noteworthy features, including easy integration with Square products, the freebie business debit card, and the ease of mobile check deposits. The following are some of the features of the Square Business Account:
#1. Square Product Integrations
The requirement of being a Square seller serves as a necessary condition for eligibility to open a Square Business Checking account. This results in seamless integration between Square’s business tools and Square’s bank accounts. The integration of banking systems mitigates the necessity for inter-platform fund transfers. The Square Point of Sale (POS) solution enables businesses to promptly retrieve and utilize their Square-generated sales income.
#2. Square Debit Card
The Square Business Checking account includes a complimentary business debit card known as the Square Debit Card. Although the actual card often requires a waiting period of seven to 10 days for delivery through the mail, you can use your card immediately upon opening an account by integrating it into online payment platforms such as Apple Pay and Google Pay.
#3. Mobile Check Deposit
Square customers can deposit checks at no cost by capturing images of their physical checks through the Square Point of Sale (POS) application. The funds derived from the deposit will then become accessible within six business days.
#4. Early Deposit Access
Square provides the option for users to access their deposits before the designated payout date. ACH deposits are often accessible up to 48 hours in advance. Although this function is implemented automatically and does not incur any additional costs, it is important to note that not all direct deposits meet the eligibility criteria. The assurance of early deposit access cannot be guaranteed and is subject to potential variation on a case-by-case basis.
#5. Instant Access To Cash
When comparing funds processed through Square and afterward transferred to an external account, it takes a period of up to two business days. On the contrary, transactions conducted on your Square business account are instantly deposited into your associated Square Checking account.
#6. International Use
Square Banking is exclusively accessible to businesses in the United States, but not the card. The Square debit card can be used globally at any location that accepts MasterCard. Additionally, Square does not impose any additional charges for foreign transactions.
#7. Automatic Transfers
The funds generated from sales made through Square are automatically sent to the Square Checking account and can be transferred to your funds within the Square Banking system without any restrictions or charges.
#8. Access To Credit
Square Banking offers a range of financial services, including the provision of small company loans spanning from $300 to $250,000. The loan offers are contingent upon the volume of card sales processed through Square and do not encompass any ongoing interest charges, but rather a fixed cost. The loan can be prepaid without incurring any penalties; however, it should be noted that prepayment does not result in a reduction of the overall outstanding balance. The repayment process occurs automatically through Square, whereby a proportionate percentage of daily card sales is deducted. Consequently, the amount to be paid fluctuates following the rate of sales activity. To maintain the loan in good standing, it is necessary to make a minimum payment equivalent to one-eighteenth of the initial total during a 60-day interval.
Advantages of a Square Business Account
The following are some of the advantages of a Square business account:
- The initial deposit required is $0.
- Instantly receive all Sqaure’s transactions
- High APY
- Access to Square Loans
Square Financial Services
The Square Financial Services is a division of Square, Inc., a financial technology (fintech) company that Jack Dorsey and Jim McKelvey founded in 2009. Square is well-known for its mobile payment solutions and hardware, such as the widely used Square Reader, which allows companies to accept card payments via smartphones and tablets.
Square Financial Services was founded with the sole objective of offering financial services to Square’s customer base, which consists mostly of small and medium-sized businesses (SMBs). The Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions granted the company permission to operate as a bank, allowing it to provide financial goods and services.
One of Square Financial Services’ primary goals was to provide business loans to Square’s merchants. Square Capital provided loans to qualified firms based on sales history processed through Square’s payment technology. These loans were created to assist SMBs in obtaining finance for a variety of business purposes, such as growing operations, purchasing inventory, or filling cash flow shortages.
How Can I Open a Square Checking Account?
It takes less than two minutes to sign up with Square Checking and a debit card. To begin selling with Square, you must first sign up. Then it’s just a couple more steps to open your bank account. Select Square Checking from the Balance applet in your Square Point of Sale app or dashboard.
- Open a new account
- Check your information.
- Make your business debit card unique.
- Confirm your business debit card’s shipping address.
Square Business Account Fees
Square has no setup, subscription, or return costs. As if that weren’t enough, it eliminated all of the necessary fees that most transaction third-party platforms impose. While Square does not charge a startup or subscription cost, it does charge any extra fees with its credit cards, as shown below:
- Credit Card Payments: Square applies a fee of 2.6% in addition to 10 cents for each instance when a customer uses a card to tap, dip, or swipe during an in-person transaction.
- Square imposes a transaction fee of 3.5% in addition to a fixed price of 15 cents per transaction for in-person payments involving manual keying of the card, as well as for virtual transactions and those made using stored card information.
- Square applies a fee of 2.9% in addition to 30 cents for transactions conducted via an online store, online checkout, e-commerce API, or online invoices.
Can I Use Square as a Business Account?
You certainly can. Using a Square Business Account can help you streamline your payment operations and boost operational efficiency. This allows you to accept payments from a variety of sources, such as cards, mobile wallets, and contactless payments.
How Much Does Square Cost Per Month?
Square doesn’t charge a fee every month or every year. Instead, the business gets money by taking a cut of each credit card transaction it handles. Most in-person purchases at Square cost 2.6% plus 10 cents. However, there is an additional charge of 3.5% plus 15 cents for manually entering the card information. Square also adds 2.9% plus 30 cents to purchases made online.
Do I Need a Business Account to Use Square?
Of course not. Although businesses use Square the most, having a business bank account is not a requirement to sign up with Square. The sole prerequisites for the account in question are that it is domiciled within the United States and has transactional capabilities, hence facilitating both deposits and withdrawals.
Does Square Have Zelle?
Square and Zelle are both means of sending or receiving money instantly. While Square provides a checking account and debit card, it isn’t in any way linked to Zelle.
Which Banks Work With Square?
According to the official Square website, Square currently supports most U.S. banks. The following banks are a few of them:
- Bank of America
- Citizens Bank
- JP Morgan Chase
- Huntington National
- PNC Bank
- Regions
- SunTrust
- TD Bank
Can I Link My Cash App to My Square Account?
Certainly, it is possible to do so. You certainly can. Cash App and Square have an integration that enables selling items as simply as possible. All you have to do is simply link your Cash App account and your Square account, and you’re good to go.
How Long Does It Take Square to Verify a Bank Account?
About 4 business days. The complete verification procedure has a maximum duration of four business days, excluding weekends and holidays. Square can’t accelerate the process.
Can I Cash a Check on Square?
Yes, you can. Square customers can deposit checks without incurring any charges by using the Square Point of Sale (POS) application to capture images of their actual checks. The funds derived from the deposit will then become accessible within six business days.
What Is the Instant Transfer Limit for Square?
$10,000. You can send up to $10,000 per transfer instantly, 24 hours a day, seven days a week. On any given day, you can initiate an unlimited number of immediate transfers but you can only send $10,000 within a week.
Does Square use PayPal?
Sure, you can. However, using PayPal necessitates an update to your Square Online account. With PayPal’s payment processor, you’ll have access to a more worldwide consumer base, allowing a broader range of customers to purchase from your website even if their credit cards aren’t accepted.
How Do I Verify My Square Bank Account?
You can verify your bank on Square with the simple steps below:
- Go to Account & Settings > Business information > Bank Accounts > Add a bank account to your online Square Dashboard. If you are changing your bank account, select Change Bank Account.
- Enter the requested bank account information.
- Click Verify.
What Cards Are Accepted by Square?
Square payment with a wide range of cards, so long as they are issued in the United States or used internationally. Generally, these cards must possess either a magstripe or chip and bear the logos of major payment networks. A good example of such cards is Visa, Mastercard, American Express, Discover, JCB, or UnionPay International. Square also provides compatibility with mobile wallets such as Apple Pay, Google Pay, and Samsung Pay.
Can Square Accept International Payments?
No, card payments across borders are not supported. This implies that Square cannot handle card transactions made outside of the country where you activated your Square account. While traveling internationally, you can accept cash transactions.
Does Square Accept Bank Transfers?
ACH bank payments through Square are a simple, safe, and inexpensive way to get paid from anywhere. Generally, it’s cheaper than credit card payments, and there are no hidden fees for deals that don’t go through.
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