Grading the Big-Tech Threat: How Banks Stack Up Against PayPal, QuickBooks, Shopify, and Square

For years, big fintechs such as PayPal, Shopify, Intuit’s QuickBooks, and Square have been busily revolutionizing the way small businesses operate by delivering capabilities that only mid-size and large companies had previously enjoyed (e.g., broad online and point-of-sale (POS) payment acceptance, e-commerce platforms, bookkeeping systems, reporting). This has led big fintech players to gain impressive traction, with small-business clients numbering in the millions. Over time, these companies have recognized the potential of their small-business portfolios and have steadily rolled out a number of financial services that encroach upon the traditional banking sector’s lines of business. Recently, this encroachment has culminated in the offering of checking/transactional accounts that outshine those from established banks and credit unions. Starting with an overview of big fintechs’ checking/transactional account products, this report illustrates how these companies have managed to gain inroads with small businesses and to what degree those small businesses are turning to big fintechs for financial services.

Key questions discussed in this report:

• How do big fintech small business checking accounts stack up against traditional accounts?
• To what degree are big fintechs making inroads into the small business financial services space?
• What are big fintechs’ strengths in the small business banking sector?
• What are their weaknesses?
• What particular big fintech players should concern banks and credit unions?
• How should banks and credit unions respond to the big fintech threat?
   

Companies Mentioned:

Apple, Celtic Bank, Evolve Bank & Trust, Google, Green Dot Bank, Hurdlr, Intuit, Melio, PayPal, QuickBooks, Silicon Valley Bank, Square, Stripe, Sutton Bank