The nation’s most recognizable chain of coffee shops recently announced that it would begin accepting payments via mobile credit card readers to add to consumers’ convenience in making purchases.
Starbucks recently revealed a new partnership with the mobile credit card reader and payment processing startup Square that will allow customers to pay for their coffee or pastries in a number of new ways, according to the coffee chain. Later this fall, customers will be able to make purchases using Pay with Square, and the tech company will now process all of Starbucks’ debit and credit card transactions.
Further, Starbucks will invest $25 million in Square, and Howard Schultz, its chairman, president and chief executive officer, will join the startup’s board of directors, the report said. In all, the deal will put Square in about 7,000 Starbucks locations.
“As the largest retail mobile payment platform in the U.S., we’re excited and proud to accept payments with Square,” said Schultz. “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. 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.”
Starbucks is often a leader in embracing new mobile payment technologies, the company said. Already, users can enter payment data into the chain’s mobile application and load money onto that, then access those funds with a few taps on their smartphone when it comes time to pay.
Square noted that about 18 million of the 27 million small businesses nationwide do not currently accept credit and debit card payments, usually because of the high cost of doing so that includes buying the necessary equipment in addition to the high cost of processing fees paid on every transaction made, the report said. Square eliminates a considerable amount of those costs by charging relatively little for its card readers.
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Mobile payments are widely considered the future of the credit card industry, but there is still some disagreement about shape the industry might eventually take. Some believe mobile payment processing will win out, while others believe it will be mobile wallet programs.
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