updated 11:00 am EDT, Wed August 8, 2012
Starbucks to invest $25 million in Square
Square has agreed a new partnership with Starbucks Coffee, reports say. Beginning this fall, Square will handle the processing of both credit and debit card transactions at all of Starbucks' 7,000 US locations. Starbucks is also planning to integrate Square Directory into its own apps and network, which could potentially expose Pay with Square users to more merchants. At a minimum, Pay with Square will allow people to find a nearby Starbucks through the Directory.
As a part of the deal Starbucks is also investing $25 million in Square, and installing CEO Howard Schultz as a member of the Square board of directors. Square has traditionally focused on supporting smaller merchants; in a letter, CEO Jack Dorsey tries to assure other clients that the company won't abandon those plans. "Square began with a really simple idea: everyone should be able to accept credit cards," he writes. "It should be easy and free to get set up, it should use simple technology people already own, and, most importantly, it should instantly adapt to any size business -- from the person chasing a dream to the largest organization on the planet. By embracing Square, Starbucks has validated these ideas as powerful tools -- not just for small businesses, but for smart businesses."
The Square technology is based on a reader which plus into an iPhone, iPad, or Android device. It's unstated which platforms Starbucks intends to support, but for a counter-based checkout system it may make more sense for the company to go with tablets.