Online lending startup SoFi, a fintech success story worth billions, withdrew its application for a bank license last month after a sexual harassment scandal prompted the departure of cofounder Mike Cagney, then CEO. But payments company Square, which hopes to secure the same type of bank license, is moving full speed ahead with its application, CEO Jack Dorsey tells Fast Company.
“I think the [regulatory] environment really changes depending on who you’re talking about,” says Dorsey, who traveled to New York this week for the unveiling of Square Register, a new hardware device. “There’s a lot of appreciation for the fact that we’ve spent eight years serving an underserved customer, an underbanked customer, both on the seller and the individual side.” Before Square unveiled its signature card reader, he adds, micro-merchants “couldn’t participate in the economy in the way that the economy was moving.”
He declined to speculate on when the application would be approved, though. “I wish I had a sense on government timelines,” he says.
SoFi, in contrast, has been and remains focused on lending to individuals in higher-income brackets with strong credit. Its first customers, like its cofounders, were graduates of Stanford’s prestigious business school.
Square started lending cash to its merchants in 2014, through a Utah-based banking partner. If regulators give the green light to its bid for an industrial-loan company charter, Square will be able to offer services like deposits in addition to loans.AH