In a conference call with reporters, the company laid out a number of benefits that the card should offer to Square sellers. The big one: It could help with cash flow, eliminating any delay between making a sale and having that money available to spend.
To be clear, businesses aren’t creating a new bank account. Instead, the card — a free debit card from Mastercard — allows them to tap into the funds that are already in their Square account, without having to transfer the money to a separate bank account first.
In addition, Square said that for 40 percent of beta testers, the Square Card is their very first business debit card, making it easier for them to track their businesses expenses, which can be crucial come tax time. And the company is also trying to encourage spending within the Square ecosystem, offering a 2.75 percent discount (2.75 percent is the company’s standard processing fee) on purchases that Square Card holders make from other Square sellers.
C.C. Nedrow, owner of Payton’s Photography in Montgomery, Illinois, has been testing out the card, and she said it’s already been useful: “As soon as I get a payment, if I need to go buy props … I don’t have to wait. The funds are available immediately.”
Nedrow admitted that even with the Square Card, it’s not always possible to keep business and personal expenses separate. But if she makes a personal purchase with the card, it’s easy to go into her account and mark it as a personal expense. And she said she even took advantage of the discount to buy some coffee right before the call.
Square Seller Lead Alyssa Henry noted that this is one of several Square cash flow products — including Square Capital, which offers cash advances to small businesses. The Square Card currently works separately, but she said, “You can imagine, at some point in the future, that there could be further ecosystem integration.”