There’s no question that Square has huge ambitions beyond swiping credit cards in the world of payments processing in the world of retail, but in a new report in Fast Company paints an interesting picture about how CEO and founder Jack Dorsey kept one particular lofty ambition in check.
Square planned to launch its own credit card, and was even testing prototype cards among its staff, but later canceled the program as the hurdles became too high, according to Fast Company. The all-black logo-less card was more of debit card than a traditional credit card, and instead of dealing with a financial partner to handle transactions, Square planned to link directly to consumers’ banks accounts. It also aimed to replace the usual paperwork of a card with simple digital receipts, notifications and transaction tracking tools, according to Fast Company.
Square has been getting deeper into consumer finance. It launched Square Wallet, which it canceled and replaced with a restaurant-focused payment app called Order, and it’s been playing with peer-to-peer payments with Square Cash. But creating its own plastic could put it in millions more potential wallets. Fast Company stated that Square was also looking into rewards and loyalty programs that not only would have increased the appeal of the card, but the profitability of the business.
So why was the project canned? According to Fast Company, creating its own credit would have put Square in direct competition financial institutions like Visa, MasterCard and the big banks that it partners with today for its merchant card processing services. Also by handling consumers’ money directly, Square would have been subject to much more strict financial regulation.