Now, Square plans to offer banking to those merchants. It’s a shrewd move from the company, and maybe an unlikely one, given Dorsey said earlier this year at a Bitcoin event that “we don’t need the banks anymore.”

Nevertheless, the company on Tuesday introduced Square Banking, which provides checking and savings accounts to small businesses. Square is also folding its existing debit card business (merchants can get prepaid debit cards loaded with cash from their sales) and lending businesses (formerly known as Square Capital) under the Square Banking brand.

Square hopes this one-stop-shop convenience will pry businesses from the likes of Wells Fargo and Chase. Square is also sweetening the pot by offering its customers no monthly fees, overdraft fees, or minimum balances, and a fixed 0.5% APY on their savings for all of 2021.

Since Square is also a business payment processor, its main draw is combining merchant sales data with banking services. Users can automatically take a set portion of their daily sales and drop it in their savings or pay back a Square loan. Different savings folders can be created to designate money for specific business goals.

Square also doesn’t require credit scores for loans, because it can determine eligibility based on each customer’s past sales data as processed through Square.

So now that Square offers banking: What’s next?

Square has been doggedly adding infrastructure to support cryptocurrencies, and has expanded its consumer-facing Cash App. The app initially had gained popularity for instant money transfers, like its competitor Venmo, but it has since been upgraded to handle everyday purchases through a linked debit card, and so that it could be used to buy cryptocurrency.

It’s not a leap to imagine Square eventually helping vendors accept cryptocurrencies for their goods and services, which Dorsey alluded to when announcing that the Bitcoin infrastructure business would include the Square Seller app, its Cash App, and newly-acquired music streaming business Tidal. There’s also room for Square to link Cash App users with vendors that use Square to give them easier ways to pay or built-in loyalty perks.

Square’s push into cryptocurrency also makes sense because it’s already generating a ton of revenue for Square. After giving users to send Bitcoin to one another in March, Cash App’s revenue blew past analyst expectations in the first quarter, taking in $5 billion versus an expected $3.3 billion. Gross profit for square was up 171% year over year, though only about a quarter of that could be attributed directly to Bitcoin.

Bank accounts also make Square’s other offerings more sticky and more convenient. People don’t like changing banks, which will be an initial hurdle for Square, but a potential boon later on.

And with no fees, maybe Square doesn’t need to have all the bells and whistles of other financial institutions to gain a foothold in the market—it just doesn’t need to be as terrible as the rest.

Dave Gershgorn 
@DaveGershgorn

Correction (July 21. 2021): An earlier version of this article misstated the number of merchants on Square. The company said there are “millions”.

NEWSWORTHY

Europe tries to stop anonymous crypto buying. A new proposal from the European Commission would force financial platforms to collect the identities of the buyer and seller in cryptocurrency transactions, as a way to fight money laundering. It would also ban financial firms from providing anonymous crypto wallets, according to BBC. This won't deter sophisticated cryptocurrency schemes, but brings cryptocurrency into similar regulations as other assets.

Reading is profitable. Epic, a digital reading platform for kids, has been acquired by Indian education tech giant Byju's for $500 million, TechCrunch reports. Epic claims to be in 90% of US schools, with 2 million teachers and 50 million children using the reading app. When students read on the platform, it collects data about which books are being read, how interested students are, and where that interest drops off.

A true privacy nightmare. A top official in the US Catholic church resigned after a Catholic media site used cell phone data from a data broker to link the priest to queer dating app Grindr, and further location data to suggest he frequented gay bars. The site bought anonymized data correlated to the priest's phone. This purchase of private cell phone data is completely legal, The Washington Post reports, shining light on the amount of data collected from smartphones and how it can be misused to abuse a person's privacy.

Bitcoin mining SPAC, that's crypto bingo. Bitcoin mining company Core Scientific is planning to go public via SPAC at a valuation of $4.3 billion, according to CNBC. For those worried about the diversity of the company's financial portfolio, it doesn't just mine Bitcoin—it also mines other coins. The company has mined more than 3,000 Bitcoins and owns about 1,700 of those itself. Whether that's a strength or a weakness depends on the price of Bitcoin that day.

FOOD FOR THOUGHT

Gallium, what a concept! Wall Street Journalist columnist Christopher Mims dives into the world of gallium, explaining how the metal was once industrial waste, but now helps power smaller and more energy-efficient gadgets. Gallium nitride, made from a combination of gallium and nitrogen, has been especially useful in shrinking down the size of power banks and smartphone chargers.

Along with its talent for conducting electricity, it’s GaN’s ability to operate at frequencies that are much higher than possible with silicon—between 30 and 500 times as fast in commercial applications—that enable chargers that are much smaller or deliver more power than traditional ones.

As our entire world becomes more and more electrified, from our sources of energy to the devices that use it, anything that more efficiently performs the critical but easy-to-overlook function of converting electricity from one form to another has the potential to become both ubiquitous and an enormous source of revenue. That’s why there are dozens of startups and established companies in this space, including Navitas Semiconductor, GaN Systems, Power Integrations, Texas Instruments, Infineon and STMicroelectronics.

IN CASE YOU MISSED IT

No crisis for ASML: A global chips crunch is fueling huge growth at this Dutch tech giant by Christiaan Hetzner

Honeywell teams with U.K. startup on a trio of quantum computing advances by Jeremy Kahn

Jeff Bezos’s historic rocket trip created one giant meme trail back on Earth by Sophie Mellor

This former Big Tech CEO is offering a $12,000 relocation package to move to West Virginia by Michal Lev-Ram

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BEFORE YOU GO

A farm app Ponzi scheme. A gripping yarn from Rest of World details how Turkish swindler Mehmet Aydın created a viral clone of the Farmville game called Farm Bank, with the twist that it allegedly supported real farms. Players invested large sums of real currency into the app, only for Aydın to run off to South America with $80 million in his pocket.

Farm Bank went on to weave a complicated, meta-business model: in 2017, the company began setting up deli franchises across Turkey. Franchisees paid Farm Bank about $30,000 (100,000 lira) to open shops that sold sausage, cheese, butter, honey, and other goods emblazoned with the Farm Bank logo — suggesting that the produce had come from the company’s livestock. It did not. 

Meanwhile, Farm Bank players received 95% of their earnings in cash and 5% in vouchers that they could use to purchase items from the delis. The company would then pay deli owners a 20% profit on the items players bought with the vouchers. More than 100 Farm Bank delis popped up throughout Turkey.