Starbuck’s Selects Square for Processing Payments

Home > Starbuck’s Selects Square for Processing Payments

Author: Leanne Westphal on August 12, 2012 - 11:26 PM

Starbucks announced plans to invest $25 million in Square, Inc. and to eventually use their mobile payment technology for processing credit and debit in all of its 7000 U.S. stores. Square has just secured its latest round of financing from private investors as analysts now value the San Francisco based company at $3.25 billion, up from $1.6 billion last year. Although Square is not yet profitable, it is one of the most highly valued technology companies of its type. As part of the deal, Starbucks Chief Executive Howard Schultz will sit on the seven members Square board of directors. In the future, Starbuck customers will be able to use Square’s payment service to “Pay with Square” via a smartphone app. After entering the prerequisite credit card information customers can just use their phone or state their name to make a payment at the Starbuck’s cash register.

Starbucks still plans on using their current cash-register systems, however there will be plans to transition the company to a Square software solution to process all credit and debit transactions at U.S. store locations. Starbucks will still support its own company mobile payment app which launched in January of last year. Square accepts credit or debit cards, while the Starbucks app is limited to debit cards only. The company has become increasingly popular with U.S. merchants with its extremely mobile credit card reader which can attach to mobile phones or devices. At the current time over 2 million U.S. merchants are able to accept payments from credit card holders using its Square Register software. Mr. Schultz stated that he decided to select Square over competing technology because of the Square solution will “enhance customer experience.”

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