POS payments provider Square is still interested in pursuing a bank charter, but how? It may be more challenging given that the company will be paying more attention to its customer-facing prepaid products like Square Cash and its Cash Card, according to CEO Jack Dorsey in the company’s earnings call yesterday.

Square CEO Jack Dorsey reiterated his interest yesterday in procuring a special national banking charter with the OCC, which earlier this week opened the application process. However, the feasibility of this plan is a bit complicated given that one of the major requirements for that charter is that the fintech must be non-depository. Square’s Cash Card is a Visa-powered prepaid card and its Cash App — a P2P rival of Venmo and Zelle — allows direct deposits. So, exactly how that is going to work out for Square is unclear.

All Dorsey said on the matter was:

So, we have an ongoing dialogue with the FDIC in Utah. We decided to withdraw and refile, which allows us to amend and strengthen some areas of our application with the FDIC. In terms of the OCC fintech charter, we’re pretty encouraged about the continued conversations between regulators and companies like ours, and we continue to believe that we’re really well positioned to broaden access to the financial system, which is our core purpose.

During the earnings call, Dorsey highlighted the importance of the Cash App and Card for Square’s overall growth strategy, and said:

Our success with Cash App is a great example, where we’re building an ecosystem of financial services for individuals in the same way that we did for businesses.

And indeed, over the past year, Square has been adding numerous features to this product from direct deposit, instant deposit and most recently its rewards program Boost.

He noted customers spent over $250 million through the Square Cash Card in June alone. This amount was three times the amount back in December, he said. The cash card, which is powered by  Visa, allows customers to make purchases, store funds and make ATM withdrawals.

On the subject of Boost, Dorsey said:

[We are] really happy with how Cash App generally is progressing, consistently a top 30 app in the App Store. I think it was as high as 15 or 14 earlier when I looked…. Boost specifically. That is one area of investment because it’s all about how we drive daily utility on Cash App.

This, of course, seems logical since reward programs is the top tool for driving consumer acquisition and retention, as can be seen in cases like JP Morgan Chase’s Sapphire card, or American Express’ travel points with Delta, both of which can attribute their popularity to the rewards and perks that come with it.

On further growing Square Cash, Dorsey said:

All these new services are the results of our focus on the long term. We’re listening to our customers, building, listening some more and always improving. We’ll continue to take the long view and push ourselves to deliver remarkable products to our customers.

Overall, payment processors have had a good quarter. PayPal disclosed it had over 2.5 billion transactions and processed over $139 billion in payments volume, 39% of which came from P2P service Venmo. First Data owned POS service Clover processed over $65 billion in global transaction volume over the 12-month period ending in June 30, and other players like Apple Pay said it crossed 1 billion in transaction numbers during this time.

Speaking of which, it is also worth noting that Square might be turning into a worthy competitor for payments giant PayPal, after declaring another quarter of strong revenues and high growth.
For the quarter ended June 30, Square reported its net revenue up 48% YOY to $815 million.