When You Pay At Starbucks, You'll Be Square
Customers that visit any of Starbucks' 7,000 retail locations will soon have a new way to pay: the worldwide coffee brand has just partnered up with Square.
Square will process every single debit and credit card payment made at a Starbucks location, an official statement says. And customers who own an Android or iOS smartphone will be able to use Pay With Square, the hands-free payment option that lets consumers keep their phones in their pockets by utilizing geo-location technology.
In one fell swoop, Square may have just doubled its annual processing volume and then some: its latest update cited an annual volume of $6 billion, and Starbucks generated nearly $13 billion in revenues over its past four quarters of business, although this launch is limited to Starbucks' U.S. operations.
And there's an investment happening here as well: Starbucks is backing Square with $25 million in Series D financing, putting the payment processor's valuation at $3.25 billion, according to TechCrunch. Additionally, Starbucks chairman and CEO Howard Schultz will be joining Square's board of directors.
“As the largest retail mobile payment platform in the U.S., we’re excited and proud to accept payments with Square,” Schultz said in an official statement announcing the partnership. “The evolving social and digital media platforms and highly innovative and relevant payment capabilities are causing seismic changes in consumer behavior and creating equally disruptive opportunities for business. Both Starbucks and Square take a similar approach when building products and running our businesses, and together we can bring the best possible payment experience to Starbucks customers.”
Speaking of mobile payments, the announcement makes it clear that Square's payment technology will not be replacing Starbucks' existing mobile payment technologies, but rather supplementing them. Starbucks expects to give its customers the option of using Pay With Square to buy coffee by this fall. Indeed, beyond the added payment volume and the not-insignificant amount of financial backing being provided through this partnership, that opportunity to expose millions of mobile users to a new way to pay may be the most valuable thing Square receives from its new partnership, as Starbucks processes one million mobile transactions each week.
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