Twitter and Square founder Jack Dorsey last evening announced an interesting partnership with Starbucks, an international coffeehouse chain, that will allow coffee lovers to pay for their lattes via Square’s iOS and Android app, as well as its merchant software and the iPhone credit card reader dongle.

Micro-payments will be initially accepted at nearly 7,000 Starbucks locations in the United States. Furthermore, Starbucks will invest millions in Square as part of the company’s Series D financing round. Not bad for a little more than two-year-old mobile payment startup…

Square explained in a blog post why Starbucks doesn’t just view Square as the simplest way to accept payments.

They see an opportunity to extend and accelerate a model they grew up with: the idea that business is local and that community plays a vital role in job creation and economic vitality.

When Starbucks builds the Square Directory into their apps and in-store Digital Network, it gives Square new visibility, driving more customers to opt-in to Square.

The Square Directory is available on Starbucks platforms such as its mobile apps and the Starbucks Digital Network.

Square’s Jack Dorsey signing a deal with Starbucks CEO Howard Shultz

According to a media release by the Seattle, Washington-headquartered company, Starbucks will also invest a cool $25 million in Dorsey’s mobile payment startup. That transaction will also give Starbucks CEO Howard Schultz a seat on Square’s board of directors.

This is exciting news as both companies also partner with Apple.

Square’s mobile payment solution debuted on the iPhone and its associated products also support Apple’s platform.

Apple on its part agreed to selling Square’s mobile credit card dongle for iOS devices at both its retail and online stores.

Furthermore, the iPhone maker was reportedly interested in investig big money into Dorsey’s other startup, Twitter, though that’s an old story.

Do you use Square’s mobile payment solution?