Square, the payments firm founded by Jim McKelvey and Twitter CEO Jack Dorsey, will file an application for a banking license.
Confirmed by Square Capital chairman Jacqueline Rees, who will also chair the new bank, Square will apply for an industrial loan company charter.
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An industrial loan company, unlike a bank, is able to offer non-financial services. This includes Square’s food delivery service Caviar and the sale of its signature dongles.
The move will be capitalised with $56m in cash and its acting CEO will be Lewis Goodwin, who recently joined Square from Green Dot Bank.
Square’s card readers and POS devices only landed in the UK in March and are also currently available in Canada, Japan, Australia, and the US.
US firm Social Finance also applied for an industrial loan charter earlier this year. If granted, it will be the first in ten years.
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