Loyalty & Rewards

Square Losing Millions Despite Starbucks Deal

Sources say that the company has lost roughly $340 million, $20 million was from the Starbucks deal.

Square has lost at least $20 million as a result of its partnership with Starbucks in 2013, according to a report in the WSJ.

In 2012, Starbucks invested $25 million into the start-up and Square was able to process its credit card transactions. However, Square’s fee on each Starbucks transaction was only 2 percent last year.  The company usually charges 2.75 percent.

But even with the low percentage, that still doesn’t explain how Square recorded a loss of $100 million. Sources told the WSJ that the company has used more than half of the roughly $340 million it has raised in venture capital.

Despite the loss, a Starbucks representative told Geekwire that they are still working with the start-up.

“Square remains an important strategic partner for Starbucks and we continue to partner together on initiatives stemming from our original agreement,” the rep said.


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