How QuickBooks Became a Direct Threat to Banks

In the past, banks and credit unions could count on small businesses to open checking accounts, apply for loans, and process payments within their walls. Today, that’s no longer the case. QuickBooks, long known as the go-to accounting software for small businesses, has steadily transformed into a full-fledged financial platform—and it’s pulling core banking activities away from traditional financial institutions at a growing pace. 

This shift has major implications for banks. Below, we break down QuickBooks’ competitive advantage, the impact on small-business banking, and what financial institutions need to understand about this emerging threat. 

QuickBooks Is No Longer Just Accounting Software

What started as a desktop-based bookkeeping tool is now a vertically integrated financial ecosystem. QuickBooks Money, QuickBooks Payments, and QuickBooks Capital allow small businesses to bank, get paid, and access credit—all without ever logging into their financial institution. This seamless, embedded experience is precisely what today’s small businesses are looking for. 

According to recent data: 

• QuickBooks processed $7.1 billion in merchant volume in Q4 2023, a growth of nearly 87% since 2021. 

• QuickBooks Money has grown to approximately 450,000 active business checking accounts, doubling since 2021. 

• The company’s small-business banking and payments revenue continues to rise—up 19% year-over-year. 

These numbers are a warning signal: banks are losing both deposits and fee income to a software company. 

QuickBooks Competitive Banking Products 

Let’s look at three key areas where QuickBooks is winning business that traditionally belonged to banks: 

1. Business Checking 

QuickBooks Money offers an FDIC-insured checking account with: 

• No monthly fees 

• 3.00% APY on “Envelopes” (digital sub-accounts) 

• Same-day deposits 

It’s deeply integrated with QuickBooks’ accounting platform, providing real-time cash flow visibility and auto-reconciliation. Traditional business checking accounts often lack these features, requiring small businesses to manually manage reconciliation and reporting across disconnected platforms. 

2. Merchant Services 

QuickBooks Payments processed over $125 billion in volume last year. Small businesses can accept payments with Tap to Pay on iPhone, eliminating the need for hardware and enabling instant payment capture at the point of service. Transactions automatically sync with invoices and accounting records. 

In contrast, many banks outsource their merchant processing capabilities, leading to higher fees, fragmented data, and limited integration with business workflows. 

3. Lending 

QuickBooks Capital provides lines of credit ranging from $1,000 to $50,000, underwritten using real-time accounting data. With AI tools like QuickBooks Assist, the platform offers personalized, timely lending recommendations based on business performance trends. 

Banks, by comparison, often rely on manual underwriting and require traditional credit applications—slowing access to working capital and creating friction for small-business borrowers. 

Strategic Implications for Banks 

QuickBooks’ approach poses a significant threat to financial institutions in three key ways: 

1. Deposit Erosion
   Fintech checking accounts like QuickBooks Money pull small-business deposits out of banks, threatening the traditional funding base.
2. Fee Income Loss
   QuickBooks’ integrated invoicing and payment tools capture the same payment processing and interchange fees that banks once relied on.
3. Loan Displacement 
   With access to a small business’s real-time financial data, QuickBooks can offer tailored loans faster and more conveniently—displacing small-ticket lending from local banks. 

Conclusion: The Platform Shift Has Already Started

QuickBooks is no longer just a bookkeeping tool—it’s a financial operating system for small businesses. By embedding banking, payments, and lending into its core platform, it’s redefining what financial services look like for small businesses. 

For banks, the message is clear: competing on legacy products and siloed experiences will no longer be enough. As small businesses increasingly adopt digital-first, embedded solutions, traditional institutions must rethink their approach to product delivery and customer experience—before they lose the relationship entirely.