Square, a mobile payments start-up, has just announced a huge partnership with Starbucks. 7,000 Starbucks stores across the United States will accept debit and credit card transactions through the Square app on customer’s smartphones.
Square was created in 2010 by Twitter founder Jack Dorsey, with the intention of processing payments easily through mobile devices. In addition to the original iPhone app, an iPad app was later released alongside an Android version as well. Square distributes a card reader that plugs into the headphone jack of a smartphone or tablet, to process credit card payments as well. The big positive of the Square system is that customers can open up a virtual tab in a store, and will receive rewards for multiple purchases. In this way, square acts as a loyalty card, only without the card.
The partnership between the coffee shop giant and the mobile payment start-up was detailed in a public letter from Square CEO Jack Dorsey, saying:
I am pleased and proud to announce that today Starbucks signed up for Square.
Square began with a really simple idea: everyone should be able to accept credit cards. It should be easy and free to get set up, it should use simple technology people already own, and, most importantly, it should instantly adapt to any size business—from the person chasing a dream to the largest organization on the planet. By embracing Square, Starbucks has validated these ideas as powerful tools—not just for small businesses, but for smart businesses.
It’s amazing to think that Starbucks began as a single coffee shop in Seattle. The concept of taking a good idea and helping it grow is not foreign to them, and Starbucks doesn’t just view Square as the simplest way to accept payments. They see an opportunity to extend and accelerate a model they grew up with: the idea that business is local and that community plays a vital role in job creation and economic vitality. When Starbucks builds the Square Directory into their apps and in-store Digital Network, it gives Square new visibility, driving more customers to opt-in to Square. And with nearly 7,000 Starbucks stores soon accepting Square, these new payers will be able to find your business (including coffeehouses) and pay with their name, building community and creating value.
Our customers make us who we are, and we are proud of every single one of you—including our newest. Our promise to you remains the same: build simple, affordable, and fast tools that level the playing field for everyone. Thank you for helping us build Square. And please share your thoughts and tweets; I’m listening.
As Howard Schultz says: #Onward,
Chairman, CEO and President of Starbucks, Howard Schultz will now have a place on the Square board of directors as a result of the partnership.
This move really is a win-win for both companies. Starbucks will make it easier than ever for customers to buy food and drink products, and the loyalty program through Square will entice customers to come back. Square on the other hand, will receive a big boost in users, as Starbucks is a nationwide chain that will no-doubt promote their partnership with Square.
This really is a positive for the whole mobile payment industry, which will benefit from some competition. Apple has introduced Passbook for iOS6 as well, so it will be interesting to see just how this new competition goes.