Block Inc., Jack Dorsey’s Financial Services Company, Expands Square Corporate Card Service to the UK, Entering Competition with Barclays, HSBC, and Lloyds for Small Business Market
Fiona Nanna, ForeMedia News
3 minutes read. Updated 5:58PM GMT Thurs, 31st October, 2024
Block, the payments company founded by tech billionaire Jack Dorsey, has launched its corporate card service, Square Card. This initiative, announced late Wednesday, positions Block to compete against established players such as American Express and Citigroup while marking its first foray into business card offerings outside North America.
Currently operational in the U.S. and Canada, Square Card is designed as a free business spending solution that accelerates access to funds following a sale. The card aims to streamline financial transactions for businesses, allowing them quicker access to revenue, which is crucial for managing cash flow effectively.
Samina Hussain-Letch, executive director of Square U.K., emphasized the importance of this product for merchants, stating, “When designing this product, we went back to our mission of making commerce easy.” According to internal research conducted by Square, small and micro businesses often prefer to have their funds consolidated in one place, and real-time access to their funds is a vital aspect of their financial management.
As Block steps into the U.K. market, it will face stiff competition from local banking giants like Lloyds and NatWest, as well as from well-capitalized European fintech companies such as Pleo, Payhawk, and Spendesk. Hussain-Letch pointed out the benefits that early adopters like The Vinyl Guys—a Stafford-based vehicle branding and signage printing shop—have experienced with the corporate card, which they used in a testing phase with domestic customers. “We’ve had some great feedback about the benefits of having instant access to funds, which really helps our small business sellers to run and grow. We know that the number one reason small businesses fail in the U.K. is due to problems with cash flow,” she explained.
Square Card enables merchants to personalize employee spending cards, featuring unique signatures and business branding. Once employees are integrated into the Square Card program, they can begin using their cards through their digital wallet apps immediately. The service stands out in the market by not charging monthly fees, maintenance fees, or foreign exchange fees, making it an attractive option for businesses seeking cost-effective solutions.
This launch comes at a critical time for the U.K., which is actively promoting itself as a destination for global technology businesses. However, the landscape is not without its challenges. Entrepreneurs in the region have raised alarms about a potential exodus of talent due to the government’s recent taxation changes. On Wednesday, Finance Minister Rachel Reeves announced a hike in the Capital Gains Tax (CGT)—a tax on investment profits. While the increase from 10% to 18% for lower rates and from 20% to 24% for higher rates may bring in an estimated £2.5 billion, it has caused concern among tech entrepreneurs who fear it could lead to a more pronounced tax burden on wealthier individuals.
In conclusion, Block’s expansion of its Square Card service to the U.K. not only marks a strategic step in its growth but also contributes to the evolving landscape of business finance in the region. As competition heats up, small and micro businesses will have more options to manage their finances, fostering a more robust economic environment.
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Block, the payments company founded by Jack Dorsey, expands its corporate card service to the UK, aiming to compete with major players like American Express. The Square Card provides faster access to funds for businesses while facing challenges from local banks and fintech firms.
