Code references in Square's latest update to its iOS app indicate that it is working on offering checking and savings accounts to its users
Context & Ripple Effects
Square has spent years assembling the pieces of a bank inside Cash App without calling it one: the Cash Drawer feature stored user balances back in 2016, and direct deposit support arrived on iOS in 2018 so paychecks could land in the app with no bank attached. Free stock trading tests followed in 2019 alongside bitcoin support, each step holding more of a user's financial life in-app.
The code references Bloomberg spotted extend that arc to its logical endpoint — actual checking and savings accounts for consumers. It would also give Square a consumer-side mirror of Square Banking, the checking, savings, and loan bundle it later shipped for merchants.
First-order effects
- Cash App users who already route paychecks through direct deposit could hold balances in FDIC-style accounts rather than an app wallet, removing the last reason to keep a separate bank for everyday money.
- PayPal's Venmo, which Cash App's balance storage was built to compete against, faces a rival offering full deposit accounts rather than just a stored balance and P2P transfers.
Second-order effects
- Consumer deposits are sticky, cheap funding — if they move from banks into Cash App, Square gains a funding base that lowers its cost of extending lending, echoing what Square Banking gives it on the merchant side.
- Traditional banks and payroll-dependent fintechs lose the default position as paycheck landing zones, forcing them to compete on rates and features against an app most customers opened for free peer-to-peer payments.
Third-order effects
- If the pattern holds, the line between payments app and chartered bank keeps dissolving, pushing regulators to decide whether app-based accounts deserve bank-grade oversight — and whether incumbents' branch networks still matter when the account lives in a phone.
- Square's trajectory — balances, direct deposit, trading, crypto, merchant banking, then consumer accounts — points toward super-app finance consolidating around whoever owns the payment rail, with banks reduced to licensed plumbing behind the interface.
The trend: Payments apps are graduating from wallets to full deposit-account providers, converting transaction users into funded banking relationships.