Payments company Square to re-apply for a bank license

NEW YORK (Reuters) - Square Inc SQ.N, the payments company led by Twitter Inc TWTR.N chief executive Jack Dorsey, is refiling its application with U.S. state and federal regulators for a bank license, the company said on Wednesday.

An advertisement for the Square Inc payment processor is seen outside a vendors site along the High Line in New York March 9, 2016. REUTERS/Shannon Stapleton

Square is applying with the Federal Deposit Insurance Corp (FDIC) for a special industrial loan company (ILC) license, that allows nontraditional financial firms to collect government-insured deposits. The bank would be Utah-chartered.

Square, which is best known for its small credit card reader, had first applied for banking charter in September 2017, but had withdrawn its application earlier this year.

If granted a license, the new unit, called Square Financial Services, mainly will be offering deposit accounts and loans to small businesses.

Since withdrawing its application, Square has been in discussions with regulators in order to address some of the questions that had been raised, a Square spokesman said in a statement.

As a result, it has enhanced certain aspects of the application, such as naming additional officers and the buildout of its Salt Lake City office, the spokesman said.

The company had named Brandon Soto, a former executive at bank holding company Green Dot Corporation, as the chief financial officer for the division, the spokesman said.

Square also provided additional documentation and information to regulators on areas including the company’s products and services, as well as the proposed bank infrastructure and governance, according to the spokesman.

Square’s banking ambitions come as financial technology companies expand the types of services they offer and move beyond their initial area of focus. Many are now seeking to attract deposits.

Square already lends to small businesses through a partnership with a bank.

Square’s intention to refile its application was first reported by the Wall Street Journal.

Reporting by Anna Irrera; Bill Trott