Starbucks And Square Go Together Like Coffee And Cream
August 9, 2012

Starbucks And Square Partner Up For Mobile Payments

Michael Harper for — Your Universe Online

In a huge move for both companies, Starbucks Coffee Company has announced a partnership with mobile payment system Square. Beginning this fall, Square will take over credit and debit card transactions at Starbucks stores across the US. When this system is fully implemented, coffee drinkers will be able order their coffee simply by saying their names.

As a part of this announcement, Starbucks will also invest $25 million in Square, and Starbucks CEO will take a place on their board.

Mobile payments have been slowly gaining ground in recent years. A partnership such as this will undeniably help catapult Square to the top of the heap of mobile payment services.

Starbucks CEO Howard Shultz and Square CEO Jack Dorsey sat down together to discuss the partnership with the press in a New York hotel lobby today. According to Shultz, Starbucks hopes to have Square payments fully implemented in 7,000 of their stores in time for the bustling holiday season, a bit of trial by fire for the startup Square.

Shultz told reporters the addition of Square in Starbucks stores is “going to enhance the customer experience.” Dorsey, on the other hand, suggested that customers shouldn´t notice a difference in the way their payments are processed, saying, “nothing changes with their typical experience.”

Starbucks doesn´t yet have plans to replace their current POS systems with Square-topped iPads, however. Customers can still pay with cash, card or Starbucks card. Square will simply take “full responsibility” for handling the transactions of these payments.

Starbucks has offered a form of mobile payments for a while now with their Starbucks Card app for Android, BlackBerry and iOS. This mobile payment app essentially moves the plastic card into a smartphone and is used in very much the same way. To pay with the app, customers simply need to open the app on their smartphone and have the barista scan the bar code displayed on their screen. Customers can also keep track of their “points” as well as reload their Starbucks card on-the-go with a stored credit card number.

By the end of the year, Square users will also be able to pay in much the same way, as their barista scans a bar code displayed on their screen. When Starbucks begins to take full advantage of Square´s GPS technologies, however, the customer´s phone will talk to the store´s system to let it know the customer has entered the store. Then, the customer´s name and picture will be available for the barista at the POS counter. A customer can easily approach the bar, order their beverage, give their name and move on. The Square app takes care of the rest.

Though Square and its technology are undoubtedly very cool, the service has not been widely adopted by many users or merchants. Putting the service on the same large stage as Starbucks could help change this fact, introducing Square to millions of Starbucks fans.

“Starbucks is one of the largest organizations in the world, taking technology like Square – simple, fast and focused on customer experience – and bringing it to a massive scale,” said Dorsey.

While Square has been popular with other, local coffee shops in different parts of the US, both Dorsey and Shultz believe having Square so widely available to these new customers will help drive the service in these smaller businesses. After all, if one out of every 10 Starbucks customers signs up for Square, their numbers could increase dramatically.

“My hope is that by creating a national footprint for Square technology in all Starbucks stores in the US, that it will be a catalyst for Square to get access to tens of thousands of other small business and democratize payments,” said Shultz.