Seattle-based coffee chain Starbucks plans to switch its processing of debit and credit card payments to mobile payments start-up Square, the two companies said on August 7, 2012. As part of the deal, Starbucks will invest USD 25 million into Square, the San Francisco-based company led by Jack Dorsey, Co-founder, Twitter Inc.
Howard Schultz, Chief Executive, Starbucks, who will join Square's board, said the tie-up would lower payment processing fees at the coffee chain's almost 7,000 company-owned shops in the United States. The alliance comes at a time when Square is facing increasingly stiff competition from rivals like eBay Inc and Intuit Inc, which offer their own mobile payment processing tools. "Hopefully the Starbucks partnership with Square is a catalyst for new businesses signing up with Square because in a sense we will validate with great confidence Square's position in the marketplace versus others," Schultz said in a joint interview with Dorsey. In its quest for small business clients who do not currently accept credit cards, Square typically touts its flat, 2.75 percent-per-transaction fee as a simple alternative to the various fees that some payment processors charge. Starbucks plans to roll out other Square products, including one that allows stores to sense when a user has walked in the door, and accept payments simply by taking the user's name. Starbucks has been a successful early adopter of technology ranging from mobile payment options to social media marketing tools like Facebook and Twitter.
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Howard Schultz, Chief Executive, Starbucks, who will join Square's board, said the tie-up would lower payment processing fees at the coffee chain's almost 7,000 company-owned shops in the United States. The alliance comes at a time when Square is facing increasingly stiff competition from rivals like eBay Inc and Intuit Inc, which offer their own mobile payment processing tools. "Hopefully the Starbucks partnership with Square is a catalyst for new businesses signing up with Square because in a sense we will validate with great confidence Square's position in the marketplace versus others," Schultz said in a joint interview with Dorsey. In its quest for small business clients who do not currently accept credit cards, Square typically touts its flat, 2.75 percent-per-transaction fee as a simple alternative to the various fees that some payment processors charge. Starbucks plans to roll out other Square products, including one that allows stores to sense when a user has walked in the door, and accept payments simply by taking the user's name. Starbucks has been a successful early adopter of technology ranging from mobile payment options to social media marketing tools like Facebook and Twitter.
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