The mobile payment Square has just made it’s biggest expansion by getting up close and personal with Starbucks. The enormous coffee chain is pumping $25 million into Square, and turning to the company to process transactions. Here’s what the deal entails:
- Customers will be able to use Pay with Square, Square’s payer application, from participating company operated U.S. Starbucks stores later this fall, and find nearby Starbucks locations within Square Directory;
- Square will process Starbucks U.S. credit and debit card transactions, which will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs;
- Using Square Directory, Starbucks customers will be able to discover local Square businesses — from specialty retailers to crafts businesses — from within a variety of Starbucks digital platforms, including the Starbucks Digital Network and eventually the Starbucks mobile payment application;
- Starbucks will invest $25 million in Square as part of the company’s Series D financing round;
- Starbucks chairman, president and ceo Howard Schultz will join Square’s Board of Directors.
Square is maintaining that this won’t effect how it works with small businesses.
What’s going to be interesting is how the iOS versions of both apps are going to meet. It seems that you’ll be able to pay for your Starbucks using the Pay With Square app, and Starbucks will integrate the Square Directory from their end. However, Starbucks already has a pretty stellar mobile payment app, one which ties to your Starbucks card and rewards. It’s not clear if Starbucks will eventually switch this over to Square’s control or not.
The change will roll out over this fall at some of the 7,000 Starbucks locations nationwide.
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