: When a small business opens a Square account, they can often obtain every financial service they need—including instant access to funds and business lending—without ever visiting a community bank.
The rise of massive, tech-forward payment companies like (Block, Inc.) and PayPal represents an "existential threat" to community banks and credit unions that fail to modernize. Unlike traditional "neobanks," these giants have deeply penetrated the banking ecosystem by offering a comprehensive suite of financial services—ranging from point-of-sale systems to small business lending—that can effectively bypass local financial institutions entirely. The Nature of the Threat Square, PayPal Pose Grave Threat to Community F...
: Transactions captured by third-party apps like PayPal , Venmo , and Square often remain within those ecosystems; only an estimated $1 of every $8 collected through these platforms typically returns to the user's primary financial institution. : When a small business opens a Square
Fintechs can be a community bank's ally in a competitive ... - BAI The Nature of the Threat : Transactions captured
: Community institutions traditionally rely on personal relationships. Square and PayPal utilize cloud-based, seamless digital experiences that minimize the importance of that local connection.
: Without the overhead of physical branches, companies like PayPal and Square can offer services at a fraction of the cost, often passing these savings to the consumer.