Starbucks Coffee announced on Wednesday that it would be partnering with Square, a leading mobile payments company, for all of its debit and credit card processing.
Not only that, but part of the deal includes Starbuck’s promise to invest $25 million in Square and the coffee giant’s CEO Howard Schultz will also join the mobile payment platform’s board of directors. The value of Square is currently around $3.25 billion.
Ready by Fall
The best part, as far as many customers are concerned, is Starbucks customers will be able to order their favorite coffee and charge it to their credit cards simply by saying their names. It’s expected is a total merge into all 7,000 Starbucks in the United States by this fall.
Square, Inc. is the company that turns our smartphones into credit card readers. It’s applicable on both Apple and Android devices. These readers make it easy for companies to process financial transactions in a safe and consistent manner and the technology has completely redefined the financial sector in terms of how consumers spend their money.
Initially, Starbucks customers will be required to show the merchant a bar code on their phones. But when Starbucks uses Square’s full GPS technology, the customer’s phone will automatically notify the store that the customer has entered, and the customer’s name and photo will pop up on the cashier’s screen. The customer will give the merchant his or her name, Starbucks will match the photo and the payment will be complete.
As many know, Square built its brand on servicing small business owners who want or need to accept credit card and debit card payments. It was designed to ensure a company could go mobile if it chose to at events, fairs and even kiosks. Now, though, this company – still in its infancy – has landed a massive franchise. Many are saying it’s readying for a more mainstream approach in its model.
Epic Partnership
“This is an epic partnership,” Square Chief Executive Office Jack Dorsey said at a press event in New York on Wednesday afternoon. The fact that Starbucks developed its own mobile phone app last year speaks volumes about the company’s forward moving approach to servicing its customers. And those customers responded with more than a million hits a week. The ease in which credit cards can be processed by the addition of Square only ramps up the commitment of both parties.
The one short term drawback is that up until now, Square wasn’t a part of the Starbucks app. When it was designed, it allowed consumers to either key their credit card numbers or save it on the Starbucks cloud. They also had the option of paying for their soy mocha latte with PayPal if they preferred. The phone app won’t be the first change, however – even as it can kick start the efforts between the two companies.
Our goal is to eventually integrate My Starbucks Rewards into the Pay with Square payment option,
a company representative said.
In recent months, Starbucks, Inc. began offering its customers various food products. With menu items such as Chipotley chicken wraps, goat cheese and vegetables, peaches and cream muffins and others, its hope is to not only broaden its payment options for consumers, but also offer healthier choices than its competitors. With both breakfast and lunch menus, it’s sure to give fast food restaurants pause, especially considering it’s already accepting debit and credit cards – which isn’t always possible in many fast food chains.
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