Square Staves Off Competition with the Launch of Two New Payroll Features

https://finovate.com/square-staves-off-competition-with-the-launch-of-two-new-payroll-features/
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Since its launch in 2009, Square has always catered to small business owners. The payment services company is best known for offering micro-to-medium sized merchants an easy way to accept payments and today Square is launching two services to make those business’ payrolls even more robust.

Explaining the problem, Square Payroll GM Caroline Hollis said, “The traditional payroll process is slow and rigid, creating cash flow constraints for employees and businesses alike. This is even more pronounced now given the current economic conditions.”

The new features include On-Demand Pay for employees and Instant Payments for employers. On-Demand Pay will allow employers to offer their workers early access to some of the wages they’ve earned, while Instant Payments helps businesses fund payroll faster than the typical time of three-to-four days.

There is a bit of a catch with these services, however. Both offerings hinge on Square’s Cash App, a mobile wallet that effectively serves as a checking account for P2P payments. With On-Demand Pay, employees can transfer up to $200 of their earned wages to Square’s Cash App for free. Transfering the funds to a third party debit card, however, incurs a 1% or $2 fee. As for Instant Payments, employees that elect to be paid via Square’s Cash App receive their pay within minutes, while those paid via direct deposit get paid “as soon as the next business day.”

The new features are not new to the fintech scene. They will, however, help Square compete with new offerings from other third party fintechs and serve as a way to help Square maintain its multi-million user base of sellers.


Photo by Amy Hirschi on Unsplash

https://finovate.com/square-staves-off-competition-with-the-launch-of-two-new-payroll-features/