Starbucks throws weight behind Square
US mobile payment firm Square has received a $ 25m investment from global coffee chain Starbucks, and the two firms have announced a partnership to accelerate usage of Square’s payment technology.
Under the terms of their partnership, Starbucks’ US customers will be able to pay for goods using Pay with Square, the payment firm’s app that allows iPhone and Android users to process transactions from their debit or credit card without the need for an additional hardware add-on. The service launches in Autumn and Starbucks chairman, president and CEO Howard Schultz will also join Square’s board of directors.
“As an entrepreneur, I understand how critical it is for new businesses to have easy and affordable access to card processing while also giving customers a choice in how they pay,” said Schultz.
More than two-thirds of the 27 million small businesses in the US currently do not accept credit or debit cards, but Schultz argued that Square’s technology will open up the door for those businesses to gain new customers while also offering entrepreneurs a tool to jump-start their business.
“This development can play a vital role in spurring small business growth and hiring, which remains one of our country’s most important issues.”
He added that the deal makes sense for Starbucks as the coffee shop chain and Square “take a similar approach when building products and running our businesses”.
The news is another welcome development for the mobile payment firm founded and headed up by Jack Dorsey, who also founded Twitter. Last week, Swedish rival iZettle was forced to stop processing Visa card transactions in three European markets; Denmark, Finland and Norway. Visa Europe said that the iZettle mobile payment service does not meet its policy requirements in these markets. In 2011, Visa Inc made a “strategic investment” of an undisclosed amount in Square.
Starbuck has a total of 17,651 outlets worldwide.