Square expands credit card & adds Bill Pay feature

Square has expanded its Square Credit Card programme and launched a Bill Pay feature for vendor payments, letting sellers use the card to pay vendors even when those vendors do not accept card payments.

The changes bring accounts payable functions to more Square users and add a new rewards structure tied to bill payments and business spending.

Under the revised card offer, the American Express-backed product now gives unlimited 3% cash back on Square Bill Pay transactions and 1.5% cash back on other purchases. Sellers can redeem rewards as cash deposits into a Square Savings account, statement credit, or free processing within the platform.

Bill Pay has also been expanded beyond its earlier use by Square Checking customers. All sellers can now use the service to pay expenses such as rent, insurance and marketing costs, with the option to fund those payments using the Square Credit Card.

If a supplier does not accept card payments, Square routes the payment in the vendor's preferred form, either as an ACH bank transfer or a cheque sent by post.

Cash flow focus

Square is positioning the move for small businesses that need more flexibility over payment timing. Many smaller operators face gaps between when bills are due and when they receive money from customers, making working capital management a persistent challenge.

The card retains several existing terms, including a dynamic credit line that can increase as a business grows, no personal guarantee, and no annual, late, or foreign transaction fees. The latest changes are intended to enable sellers to manage spending, credit, and vendor payments from the same system.

Other Bill Pay updates include optical character recognition scanning for bill capture, simpler vendor set-up and new access points in the Square Dashboard. Funding through external bank accounts is also due soon.

The number of sellers actively using Square Credit Card has doubled since eligibility was expanded at the end of last year, which Square presented as evidence of demand for a card designed around routine business spending rather than travel rewards.

Melvin Bontrager, Owner, Rainer's TCG Shop, described how the product fits his business's inventory buying.

"When it comes to running a trading card shop, inventory is everything. We manage over 10,000 items, and when the right cards come up, I have to move quickly. That can mean spending thousands on the spot before the window to act closes," Bontrager said.

"Square Credit Card makes that possible: I can put inventory on the card, earn cash back with every purchase, and automatically pay down my balance from my daily sales without disrupting my cash flow. And having my sales, banking, and credit card all in Square means I always know where I stand financially. When you're moving this much inventory, that clarity is worth a lot."

Broader push

The expansion is part of a wider effort by Square to deepen its banking and finance products for merchants using its payments and commerce software. Earlier this year, the company broadened access to Square Loans after updating underwriting models to assess sellers new to the platform and seasonal businesses.

Square has also partnered with Homegrown to offer expansion capital of up to USD $1 million for eligible multi-location sellers planning another site. The credit card and bill payment changes continue that strategy by giving merchants more ways to manage outgoings without leaving the Square ecosystem.

Andrea Raj, Head of Product for Square Banking, said the company built the new option around a common pressure point for small firms.

"Small business owners are too often forced to choose between paying vendors on time and holding onto their cash," Raj said. "Standalone solutions typically come with additional costs to bridge that gap, and even then, don't solve the entire problem: you're still spending your cash on hand, or putting it on a card not designed for small businesses. We built the opposite. Pay vendors on time, keep cash longer, and earn the right rewards for it, all in one place and while saving on fees. That's only possible because it's built into the platform sellers already run their business on."