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?

  • I use PayPal (they have a dongle too, called PayPal Here)
    I have a Square account and dongle, but its easier to to use PayPal since more people know them, making its more trust worthy.

    • No Whammy

      …and more expensive.

  • No Whammy

    Wait what? I go to Starbucks, pull out my iPhone, plug in my Square, open the Starbucks app, order my crap, pull out my wallet, swipe my card, pull the Square out, put my card back in my wallet, then get my drink? This has to be the stupidest idea I’ve ever heard.

    I’m obviously not understanding how this works.

    • you go to Starbucks, order your drink tell the cashier your name and you are done!

      Of course you need to have your cell with you (pocket, purse)

      this app is not the same as the one is use to receive payments…

      • No Whammy

        Well I don’t really get the Square device part then. Sounds like they’ll be using their wallet thing. I’m wondering how different this is from Starbuck’s current phone ordering system that no one seems to be using.

      • doesnt make sense to me either lol

  • Why didn’t just invest in NFC paypass in their stores.

  • you don’t have to show your phone, you will just tell your name and your picture with your name will appear on their screen as soon as you walk in… I have being using that feature for the past 6 months on two of my business, and its great.

  • I’ve really wanted to, I downloaded the app, registered, and love the simplicity of the interface. However, there are no nearby locations that I want to visit, or they just are not close enough to make it worth the effort to try using it.

    I am a bit confused with the “merger” of Square in to the Starbucks payment app – I use the Starbucks App all the time to pay for my coffee and other merchandise.

    So, I don’t really see the point of Starbucks adding Square, it seems redundant, unless they are dumping their existing payment system for Square, which does make sense in light of the investment.