Payment Start-up Square Inks Major Partnership with Starbucks
Mobile payment start-up Square just announced a pretty stellar partnership with Starbucks. Starting this fall, Square will be powering all credit and debit card payments at 7,000 Starbucks locations across the U.S. Bonus: Starbucks is also investing $25 million, and CEO Howard Schultz will join Square’s board.
Starbucks said it will be using the San Francisco-based start-up’s new Pay With Square app, which launched earlier this summer. The app lets users buy a croissant or a cup of Joe simply via mobile phone--no credit card swipe required.
The investment will bring Square’s value to a staggering $3.25 billion, according to The New York Times. The company has so far raised $166 million in total funding, and other investors include Richard Branson, Sequoia Capital, and Kleiner Perkins.
Currently, most of Square’s users are small businesses, which rely on the company’s credit card reader to process purchases. However, the Starbucks deal could make the new app more mainstream than the swipe-reader.
“The consumer is going through a seismic change in which cash is eventually going to be obsolete,” Schultz told CBS News.
Square, launched in 2009, has arguably been ahead of the curve in the mobile payment space, which has big competition from companies including Google, Intuit, and eBay's PayPal as big players.