Starbucks launches Square payments across 7,000 U.S. stores


Beginning today, consumers may pay for their Starbucks Coffee Company purchases using the Square Wallet application for iOS and Android devices.

Roughly 7,000 Starbucks stores across the U.S. now accept Square Wallet, which links to a consumer's debit or credit card to process transactions--the app generates a QR code scanned by a Starbucks digital reader terminal, and automatically transmits a digital receipt when the purchase is complete. Square Wallet also offers access to Starbucks menu information, store hours and locations and the user's transaction history.

Starbucks first announced its intention to adopt Square services in August, a move to slash operational costs across its retail footprint. Square charges a flat fee of 2.75 percent on all purchases, lower than conventional credit and debit card transactions, and promises no contracts, monthly fees or hidden costs. Starbucks also invested $25 million in Square's Series D financing round (which eventually reached $200 million in total)--in addition, Starbucks CEO Howard Schultz is joining the Square board.

Beyond Square Wallet, Starbucks has said it plans to swap out its existing point-of-sale processing hardware in favor of the Square Card Reader, which enables businesses to swipe credit and debit cards through a dongle plugged into a smartphone or tablet audio jack. Starbucks also will support Pay with Square, which allows consumers to make purchases and settle tabs without ever removing their mobile device from their pocket or purse, leveraging geofencing technology to identify when a user's smartphone is within 100 meters of a participating merchant. The firms have not announced a timetable for those implementations.

Alongside Square, Starbucks will continue to support its Starbucks Card Mobile App, which connects iPhone, Android and BlackBerry devices to the consumer's prepaid Starbucks Card account to enable barcode-based transactions similar to Square Wallet. Starbucks customers use the app more than 2 million times each week.

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