Starbucks, which has arguably been a leader when it comes to allowing customers to pay for drinks and rack up points on loyalty cards using their mobile phones, today announced what it is calling a "broad innovative partnership" with mobile payments provider Square.
Starbucks will invest $25 million in Square as part of the company’s Series D financing round. Meanwhile, Starbucks Chairman, President and CEO, Howard Schultz, will join Square’s board of directors.
“The evolving social and digital media platforms and highly innovative and relevant payment capabilities are causing seismic changes in consumer behavior and creating equally disruptive opportunities for business,” Shultz said in a statement. “Both Starbucks and Square take a similar approach when building products and running our businesses, and together we can bring the best possible payment experience to Starbucks customers.”
Through the partnership, Starbucks customers will be able to use “Pay with Square”, Square’s mobile app, from participating company operated U.S. Starbucks stores later this fall, and find nearby Starbucks locations within Square Directory.
Starbucks customers will still be able to use their existing Starbucks mobile apps to pay at the register as well.
Square will also process Starbucks U.S. credit and debit card transactions, which the company says will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs.