Mobile payment start-up Square has just taken a monumental leap towards the mainstream, linking up with coffee giant Starbucks, as announced by the San Francisco company’s website. According to the partnership, Square will process all of the debit and credit card transactions for 7,000 US Starbucks locations, resulting in service to millions of customers.
Customers will also be able to pay using Square’s innovative Pay with Square mobile app for even faster payment. The deal is huge for both parties, as Starbucks is the largest retail mobile payment platform in the US, generating revenue for Square while also offering the coffee retailer a means to saving significant amounts in processing fees.
The deal is also a partnership on another front, as Starbucks will be investing $25 million into Square as part of the company’s Series D funding. The mobile payment company will also be able to boast business visionary Howard Schultz, CEO of Starbucks as a board member. The financing obviously gives Starbucks some skin in the game so to speak, as Square’s success now impacts their success. We see it as a definite testament to Square’s model and potential.
The investment also brings Square’s valuation to a cool $3.25 billion as the company collects funding to bring its service to more retailers and merchants of all sizes world round. Square already boasts an impressive $5 billion in processed payments and given the exposure this move will give them, that is sure to go up.
The move also represents a watershed moment for mobile payments and digital wallets. Thousands of credit and debit transactions will now be processed daily within Starbucks, with patrons receiving daily exposure to Square’s reader and software. According to an interview with VenutreBeat, Shultz confirmed that his intent in the union was twofold; to enhance Starbucks’ customer service while also giving Square the exposure it deserves.
Jack Dorsey and his team are obviously giddy about the whole thing, with the man releasing the following statement:
We’re proud that Starbucks chose Square, as we share the value of always putting customers first. More than 2 million individuals and businesses can already use Square. This partnership will accelerate our ability to provide them with the tools they need to grow their business and thrive in today’s economy.
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