Square enables direct payment to their Cash app
You can now accept payments, such as your salary or money from friends, directly to the Square Cash app, according to news from the innovative payments company, by bank transfer.
PAYDAY! Cash App now supports direct deposits for your paychecks. Give your employer the account and routing number in your Cash settings, and we’ll notify you the second that direct deposit hits.
– Square on Twitter
It’s worth noting that Square doesn’t yet have a bank charter (and maybe doesn’t want one), and they’ve built out their financial services offering by partnering with existing. That’s how they offer a debit card to users and now this direct deposit function. The debit card is issued by Sutton Bank and now it seems like the direct deposit feature is facilitated by Lincoln Savings Bank. They is giving Cash app users a sort code (or routing number in US parlance) and an account number to use for making deposits. It looks like this function is only currently on offer to Square users in the USA. But they do have global ambitions.
Companies like Square are fighting it out to become broad-based finance companies offering consumer services, and those services are increasingly about offering what could be considered traditional banking functionality. The question that remains is why they don’t simply become banks and give themselves the freedom to operate accordingly. Perhaps because the regulations are too onerous?