When we look back on the history of mobile payments, some analysts and historians might point to the partnership of Square and Starbucks as the watershed moment when mobile payments went mainstream.
Square is the darling of the mobile-payments industry, in part because of its all-star, tech-famous team of founders, which counts Jack Dorsey of Twitter among them. But Square went from buzzworthy startup company to major player with the recent news that it was now partnering with Starbucks to process all of the coffee chain’s credit and debit transactions, according to Payment News.
And that’s not all. Starbucks is set to deploy Pay with Square, the company’s smartphone/tablet mobile-payment solution, in its stores this fall, and Starbucks is investing $25 million in Square’s Series D financing round. Talk about a leg up in the game — Square just leapfrogged to the front of the mobile-payments line.
But what does this mean for the rest of the players in the mobile-payments ecosystem?
Marcie Haitema, a banking and payments expert, wrote in a blog post that the partnership is a historic moment for both companies. She also notes that the two companies have a shared DNA in catering to the customer experience in ways that many companies do not.
I applaud the leadership of both companies for so brilliantly pursuing this partnership and see this deal as a potential win-win for everyone. Square has expanded its reach and achieved major validation of its business model beyond the small business market.
The company promotes consumer awareness of other Square merchants via its Pay with Square directory. Starbucks adds in an even simpler payment method via Pay with Square and its GPS technology will alert baristas when you walk in the door to your presence, present your name and picture on the POS terminal to validate who you are and a simple “yes” to complete the purchasing process. Like it!
So now that Square has blasted the hinges off of the mobile-payments door, we’ll soon be tossing our wallets in the garbage, right? Well, maybe not quite yet. But we’re definitely one big step closer to that reality.