Loyalty & Rewards

Starbucks To Square: No More Mobile Pay For You

Starbucks, the coffeehouse giant that payments startup Square hoped would help it break in among big retailers, will no longer be accepting Square’s app for mobile payments, ReadWrite reported.

However, Square will continue to be the credit- and debit-card payments processor for Starbucks, whose own mobile app accounts for 16 percent of all transactions in Starbucks stores, more than 7 million each week.

The shift comes as Square officially retired its Square Wallet app last week, replacing it with a new Wallet-like feature in Square’s Order app. Wallet was the payment method that Square offered in Starbucks stores after sealing a partnership that gave Square a foot inside Starbucks stores and shifted Starbucks’ card processing to Square from Bank of America Merchant Services.

“Starbucks is not adopting Square Order in our stores,” said Maggie Jantzen, a spokesperson for Starbucks. “We opted to build our own mobile ordering solution, leveraging our own mobile app and world-class loyalty program.”

Starbucks began testing the iPhone version of that no-wait app this month in its Portland, Oregon, stores.

Starbucks CEO Howard Schultz, who joined Square’s board in August 2012 as part of the partnership with Square but left the board in October 2013, has since said that mobile payments is a key business for Starbucks, and the company is considering offering its system to other retailers, putting it squarely in competition with Square. Schultz claims that in 2013, 90 percent of all U.S. mobile transactions were made in Starbucks stores.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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