Starbucks has announced that it is adopting the Square payment platform for all its North American stores. Until now, Square has largely been used only by small businesses and individual remote sellers to process credit card payments, but Starbucks plans to invest $25 million into the year-old company, and CEO Howard Schultz is joining its board.
The Square pay system involves a small credit card processor directly to the seller’s iPhone. Square charges sellers a 2.75 percent fee on each major credit card transaction. The system is currently used by some 2 million merchants throughout the world.
The Starbucks partnership will incorporate Square’s Pay With Square system, which will allow buyers to pay for their lattes without even removing their phones from their pockets. The Pay With Square app uses GPS to track the phone’s location, the customer simply gives his name to the barista, and the barista calls up a photo from the Square system for a positive identification.
“As an entrepreneur, I understand how critical it is for new businesses to have easy and affordable access to card processing while also giving customers a choice in how they pay,” Schultz said in a press release. “Because Square’s revolutionary technology allows anyone to accept credit and debit cards, it gives entrepreneurs an essential tool to jump-start their business while providing existing small companies access to new customers.”