- The payments company is giving sellers that use Square for payroll the option to provide health care, retirement savings and other benefits to their employees.
- Square executives say this solves one of the biggest pain points for small businesses.
- The product adds to Square's growing small business product suite, which includes loans and payment processing.
Square is ramping up its bet on small businesses by offering big company benefits.
The fintech firm, run by Twitter CEO Jack Dorsey, announced on Wednesday it would give small businesses using its payroll platform the option to offer perks like health insurance and retirement savings to employees.
"It's a new enhancement to the Square platform and a powerful solution that has historically been cost-prohibitive to small businesses," Alyssa Henry, head of Square seller and developer business units, said on a call with reporters.
The San Francisco-based company partnered with only "technology-focused" firms — SimplyInsured, Guideline 401(k), Alice, and AP Intego. The available benefits range from health insurance, retirement savings, pre-tax spending, and workers' compensation.
Businesses that use Square Payroll, a product that became available nationwide last month, can pick one or all of the benefit options for their employees. Those benefits will sync with Square Payroll and automate deductions and business contributions, which also helps with tax compliance, the company said.
The move came after a recent company survey showed that 42 percent of Square users listed "benefits" as the top new product request.
"That confirmed what we've been hearing anecdotally," said Caroline Hollis, head of Square Payroll. "Offering access to benefits was the most difficult thing we hadn't solved for in the space."
Square has significantly expanded its small-business product suite since the company launched in 2009. It started with credit card processing and payment hardware but now includes payroll services, and loans through Square Capital. It also launched a payment installment option in October.
The company reported earnings last week that beat Wall Street's expectations for the top and bottom line, but came up slightly short on fourth-quarter guidance. The stock has been on a tear this year, up more than 110 percent since January.
Square is also well-known in the payments sector for its popular Cash app, which CEO Jack Dorsey said customers are now using as a traditional bank in many cases.
"We do see people use the Cash App fundamentally as you would expect them to use a bank account," Dorsey said on a the earnings call last week. "They store money with us, it's accepted anywhere Visa is accepted. They can send and receive money from friends and family."