The newest feature Square added to its Cash App is powered by a bank in Northeast Iowa.
According to a story last Wednesday on Tech Crunch, the Cash App from Square offers out support for direct deposits, allowing Cash App users to get their paycheck or other deposits put directly into their Cash App balance. After accepting a disclosure, the user is given an account number and routing number. Users then get a notification when deposits hit their account.
And since Square doesn’t have a bank charter, Tech Crunch reported the direct deposit feature is powered by Lincoln Savings Bank, which is headquartered in Reinbeck and has locations throughout Central and Eastern Iowa.
Mike McCrary is the Vice President of e-commerce and emerging technology for Lincoln Savings Bank and told Clay & Milk that conversations with Square started as far back as 2016.
“We, unfortunately, cannot give a lot of details,” McCrary said when asked about specific details between Square and Lincoln Savings Bank. “It’s tricky, but we’re awesome.”
McCrary said that back in 2013, Lincoln Savings Bank made the decision that FinTech was something to keep an eye on.
“We were seeing Dwolla, Stripe and others picking up on specific pieces of the industry and building something more elegant around that, whether it was for saving money, spending money or moving money,” McCrary explained. “We decided this is a thing we need to put some resources towards. The thought process was either build our own or partner with people who are building.”
McCrary said the team at Lincoln Savings Bank was impressed with Square not only for its technology but its company culture.
“When we first approached them we were a little intimidated by their size, I mean it’s Square,” McCrary said. “But one of the things we realized pretty quickly was that we felt we were all on the same page. It speaks to the sincerity and the work culture at Square.”
Karris Golden is the VP of e-commerce operations for Lincoln Savings Bank and agreed that the company culture at Square fit in with their own.
“They value our input and the work we do,” Golden said. “This world-class organization is making a strong attempt to bring that trust in banking to the FinTech space.”
“We’re always happy to talk to fintechs, new or later-stage about what they’re building,” McCrary said. “It’s an energized and diverse community we’re pleased to be part of.”
McCrary hopes Lincoln Savings Bank can leverage the relationships its built with Square to make itself a better community bank.
“We feel super cool,” McCrary says. “We really value our corporate roots of being an Iowa community bank, that’s the center of the story for us.”