|
The Square Advantage
Small Business Saturday — sandwiched between Black Friday and Cyber Monday — should be a gift for many small businesses this holiday season, generating 20% of the average annual revenue for small businesses in retail, hospitality, recreational and personal services, according to American Express Co.
It’s been a tough time for small businesses due to higher costs in recent years, according to the U.S. Chamber of Commerce’s Small Business Index for the third quarter. And those expenses drove increased demand for loans in 2024 and 2025, per an October report from the small business lender Cardiff, just as some banks have tightened underwriting in response to economic uncertainty.
By and large, the majority of small businesses view a traditional bank as their primary financial services provider, according to the Federal Reserve. But those who choose to work with nonbanks indicated they had a relationship with those providers that went beyond deposits, extending to loans, payment processing and payroll.
The fact that a set of small businesses largely lean on banks for deposits and nonbanks for everything else tells me that those nonbanks have figured what small businesses need. We’ve asked community bank leaders about competition for several years now in Bank Director’s annual Technology Survey, and I’ve been surprised that more aren’t looking outside their markets to competitors like Block, which owns Square.
At Block’s recent investor day, company head Jack Dorsey talked about leveraging data in Square’s early days to expand the business beyond the simple card reader it launched in 2009. It’s all centered around making sellers’ lives easier, through financing, running payroll, invoicing clients and powering online checkout. Customers can even pay using Cash App Afterpay, Block’s buy now pay later product.
Dorsey announced at the event that Block will now offer its customers an AI-powered manager. “We see this as a way to automate payroll, scheduling, inventory, marketing, all the mundane tasks that a seller has to do,” said Dorsey.
Business Lead Owen Jennings added that artificial intelligence agents will anticipate needs for sellers, such as low stock or spikes in orders. “It will offer proactive intelligence to our sellers so that they can make smarter decisions and run their business more efficiently,” Jennings said.
As small businesses further tighten their belts, they’ll need someone in their corner. Will that be Square, or will it be your bank?
• Emily McCormick, vice president of editorial & research for Bank Director
| 
