Starbucks starts taking Square Wallet
About 7,000 US Starbucks locations are beginning to accept payments using Square's mobile payment application for smartphones.
By Chris Ciaccia, TheStreet.com
The partnership that promises to bring the mobile-payments revolution to the forefront launched Nov. 8, as Square, the start-up that has developed a software-based mobile wallet, rolls out its mobile-payments app at approximately 7,000 Starbucks (SBUX) outlets.
As Square Wallet goes into effect for Starbucks customers, the two companies hope their relationship transforms the mobile-payments experience.
"We look forward to continuing to create amazing connections with our customers, both in our stores and outside of our stores, and offering our customers choices in how they want to pay," said Adam Brotman, Starbucks' chief digital officer, in a news release.
"Starbucks believes in the values and vision of Square," Brotman continued, "and just three months after announcing our partnership with Square we are thrilled to make the convenience of paying with the Square Wallet app available to our customers, starting today."
Square Wallet will give customers the ability to pay for what they buy at Starbucks while also exploring nearby businesses and browsing menu information, among other features. The free app is available on both Apple's (AAPL) iOS platform and Google's (GOOG) Android platform.
Square, led by Twitter co-founder Jack Dorsey, has been at the forefront of the mobile payments revolution. The company sees the Starbucks launch as an opportunity to see how customers use Square Wallet to pay for everyday goods and services.
Starbucks did $3.36 billion in revenue in its fourth quarter, with a significant portion of those transactions representing credit- and debit-card sales. Starbucks does not break down the percentage of payments.
Starbucks has its own mobile payment app, but the Seattle company's deal with Square takes mobile payments to another level.
"Starbucks has scale, with 7,000 U.S. stores, and the (Square) partnership will likely be a key reference case for awareness of mobile retailing," JPMorgan wrote in a recent research note.
According to Ernst & Young, mobile payments will become a big business. The market is projected to reach $245 billion by 2014. Companies are fighting hard for those dollars, and getting a jump on the competition is a potentially significant development.
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