Starbucks huddles up with Square for mobile payment system across the US

As the technology is rapidly evolving, the concept of electronic money is taking root with the same speed. Coffee shop chain Starbucks is taking the new concept quite seriously. The magnitude of such a rigid attitude can be measured from the company’s investment in mobile payment enterprise called Square.

Seattle-based Starbucks announced on Tuesday a wide-range partnership with San Francisco-based Square, which was co-founded in 2009 by Twitter inventor Jack Dorsey. Being a start-up since 2009, the Startbucks deal is a breakthrough but given the network of coffee company many experts are of the opinion that Square’s luck has struck gold.

Starbucks will use Square’s mobile payment application at its roughly 7,000 U.S. stores this fall. Square also will process Starbucks’ U.S. credit and debit card transactions, giving the Square platform needed scale. Plus, customers will be able to make use of Square directory of businesses to find and locate any nearby Starbucks outlet in an area.

Despite the increasing concentration of mobile users toward smartphones, electronic payment system has caught little or no attention at all. Starbucks is the first US company to utilize Square’s mobile payment modile.

Starbucks will invest $25 million in Square and Starbucks CEO Howard Schultz will join Square’s board. The investment values Square at $3.25 billion, the New York Times reported.

“More than 2 million individuals and businesses can already use Square,” said Square CEO Dorsey. “This partnership will accelerate our ability to provide them with the tools they need to grow their business and thrive in today’s economy.”

The Pay with Square application is available for Apple iPhone and Google Android-based smartphones.

Apple, Google, Intuit and eBay’s PayPal are among the companies also pursuing, or expected to pursue, the digital wallet business.

Meanwhile, shares of VeriFone Systems, a maker of retail point-of-sale terminals, fell 10% in early afternoon trading Wednesday after UBS downgraded the stock to neutral from a buy rating.

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Posted by Usman Khalid on Aug 9 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.