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Starbucks Chooses Square for Payments
- MIT_Hacker 14y agoLink to an article that explains it as well: http://content.usatoday.com/communities/technologylive/post/2012/08/starbucks-to-accept-square-mobile-payment/1#.UCHlpMiNZho http://content.usatoday.com/communities/technologylive/post/...
- trafnar 14y agoInteresting: "As part of the joint venture, Starbucks will invest $25 million in Square and hold an equity stake. Howard Schultz, Starbucks chairman and CEO, will join Square's board of directors." Strange: "After ordering an item, they waive the phone on a scanner."
- Wingman4l7 14y agoJust a lazy journalist; spell-check won't fix heterographs.[1] [1]: http://en.wikipedia.org/wiki/Homonym#Related_terms http://en.wikipedia.org/wiki/Homonym#Related_terms
- peppertree 14y agoI don't see how this benefits Starbucks.
- MIT_Hacker 14y agoI think part of the benefit comes from discovery in the Square directory. Also, Pay with Square is a revolutionary idea which is now accepted at Starbucks
- johnrob 14y agoAs part of the joint venture, Starbucks will invest $25 million in Square and hold an equity stake. Howard Schultz, Starbucks chairman and CEO, will join Square's board of directors. With ~7000 stores, Starbucks can be a Walmart of sorts in terms of location based services.
- danielpal 14y agoI do. Have you ever just bought something on Amazon because it's just easier? Wouldn't you buy at Startbucks instead of seattle best coffee if it were "easier"?
- xxcode 14y agobtw, not that it matters, but Seattle Best Coffee is owned by Starbucks.
- sown 14y agoMy family has owned small businesses before and one of the more annoying parts is dealing with the credit card machine and merchant vendors. The rates were always high, the machines were kind of confusing to use and were expensive. The deposits might take a little while. A minor point for the younger people in the family running a business was that they weren't very trendy or hip looking, either. Small business owners have little of either time or money. Anything you can do to improve that is appreciated. Although SBUX is much larger than the family owned businesses I'm familiar with, I'm sure they appreciate it, too. We've only owned 1 restaurant and if we were high volume enough, being able to carry the register over to the table and have customers pay right away would have been useful. If I'm reading Square's website correctly, there's a minimum $1 transaction? Our shoe store in 1990 probably wouldn't have cared. Our coffee shop today would care, though.
- tedunangst 14y agoIs Starbucks going to stop accepting credit cards? Adding less confusing new machines to the confusing old machines does not result in less average confusion. [sorry, that was retarded, I confused square with a different payment system. disregard.]
- deleted 14y ago[deleted]
- MIT_Hacker 14y agoStarbucks will still be accepting credit cards, cash, and now even Pay with Square tabs!
- fffggg 14y agoNo. Square's product is all about accepting credit cards. From the press release: "Square will process Starbucks U.S. credit and debit card transactions, which will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs" https://squareup.com/news/releases/2012/square-starbucks https://squareup.com/news/releases/2012/square-starbucks The Square Register product takes plastic as well as letting people pay via the geo-fencing Pay with Square app.
- pbreit 14y agoWhen a Square customer walks into a Starbucks, that person's name, picture and order history will automatically pop up onto Starbucks' terminals. It's hard to exaggerate the benefit of such.
- dantle 14y agoMe neither. No restaurant can afford 2.75% per transaction going to Square versus the 1.64% which goes to Visa/Mastercard/Discover[1]. Fortunately for Starbucks, people are willing to pay much more for their cup of coffee than it costs them to make. [1] http://payments.intuit.com/pricing/ http://payments.intuit.com/pricing/
- deleted 14y ago[deleted]
- Groxx 14y agoAt the scale Starbucks will single-handedly bring them to, you really think they'll be using the default pricing? Regardless, they're very clear on the post: >Square will process Starbucks U.S. credit and debit card transactions, which will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs; Starbucks saves payment processing costs. That's benefitting them.
- kingnothing 14y agoSquare is probably charging cost, or even losing money on this one, just to gain the market share.
- danudey 14y agoLoss leaders can be a good idea sometimes, but when you're dealing with the sort of volume that Starbucks deals with, losing any money at all per transaction is a truly terrible idea.
- CamperBob2 14y agoFortunately for Starbucks, people are willing to pay much more for their cup of coffee than it costs them to make. One interesting problem with this deal is that it will call attention to just how much money Square users really are spending at Starbucks. Imagine if most or all of the charges on your Visa bill were from Starbucks, such that you couldn't help but see the total staring you in the face every month. That's the position a Square user will find himself/herself in, at least until more merchants come on board.
- erikpukinskis 14y agoStarbucks' massive influence in the payment space is an asset. They're potentially a kingmaker for payment providers. Who else, besides McDonalds, processes as many payments in as geographically diverse an area? By partnering with Square in return for equity, they are making a play to capitalize on that position. If Square wins in this space, which is much more likely with Starbucks in their corner, Starbucks gets a massive payday. If they just stick with their existing provider, who is likely already maxed out on their growth curve, there is no such opportunity.
- zht 14y agothis is a huge deal
- sown 14y agoI've heard of killer apps but I wonder if there's such a thing as a killer vendor/customer. I hate being too dumb to work at places like this. :(
- ChuckMcM 14y agoAbsolutely, there are deals that 'make' the company. Look at Google's initial deal with AOL, that was pretty huge for Google at the time.
- dm8 14y agoIt was Google's deal with Yahoo that catapulted them to mega success! They were Yahoo's OEM for search and Yahoo was Internet's home page at that time.
- ChuckMcM 14y agoYou are right of course, I keep seeing various reports over the years of the AOL deal [1] which clouds ones memory ... [1] http://www.huffingtonpost.com/2010/09/02/aol-google-search-deal-re_n_703566.html http://www.huffingtonpost.com/2010/09/02/aol-google-search-d...
- deleted 14y ago[deleted]
- pbreit 14y agoI think you're right. Starbucks is absolutely the best possible partner/customer to help Square make "Pay With Square" a broad reality.
- philip1209 14y agoFurthermore, I think that Starbucks made itself the best possible partner/consumer for "Pay With Square" by pursuing the Starbucks Card program outside of traditional payment solutions. Ostensibly, they stumbled upon the opportunity for such a non-traditional payment system, and thus validated the Square strategy prior to the partnership.
- hamey 14y agoPerfect deal for seeding Square broadly. Awesome!
- dr_ 14y agoThis is a big deal. Quite honestly I've never understood the benefit of the traditional Starbucks app, where you swipe your phone in front of their scanner. How is This any different than giving them your cc or sbux card. Paying by name is super convenient, and could help reduce the lines especially with regulars. I've tried it recently at sight glass and it works great.
- jarek 14y agoWith the app, you don't have to carry the Starbucks card with you. Not a huge deal but some people will enjoy one less card. With just the credit card, you don't get rewards.
- theneb 14y agoSquare have still yet to break into the European market despite claims from their vanished blog that they were planning to in 2012. This was at the same time as taking Branson on board. It might stand that they're trying to strengthen their core business in the USA, Starbucks could be a good gateway for them moving forward into other countries.
- brackin 14y agoIt's almost impossible for Square to launch in Europe with their traditional product (Swipe) but they probably could with Pay with Square. Their European rival had to jump through huge technical hoops (payments offsite, can't swipe, etc) to develop a product and it is a huge box off the phone and they are now trying to jump through more as credit card providers have raised their barrier.
- nandemo 14y agoOut of curiosity I looked up some of the earliest HN stories on Square, posted about 2 years ago: Square http://news.ycombinator.com/item?id=970565 http://news.ycombinator.com/item?id=970565 (0 comments) Square Worth $40 Million Before Launch http://news.ycombinator.com/item?id=970880 http://news.ycombinator.com/item?id=970880 Jack Dorsey on Square, How it Works & Why it Disrupts http://news.ycombinator.com/item?id=971596 http://news.ycombinator.com/item?id=971596 Square: All Hype and Little Value for Small Business http://news.ycombinator.com/item?id=1148953 http://news.ycombinator.com/item?id=1148953
- robbiemitchell 14y agoHa. The last link (points to a FeeFighters blog post) has the hallmarks of a "next big thing"--namely, dismissed first as a "toy". cf. http://cdixon.org/2010/01/03/the-next-big-thing-will-start-out-looking-like-a-toy/ http://cdixon.org/2010/01/03/the-next-big-thing-will-start-o...
- Cherian_Abraham 14y agoYou already let the Barrista tag your coffee with your name at Starbucks. Its only natural that now you get to pay for coffee with your name.
- prawks 14y agoThe real question now is how long will it be until Apple integrates it's own credit card payment system into iPhones to kill Square.
- uptown 14y agoLike this? http://www.starbucks.com/coffeehouse/mobile-apps/ http://www.starbucks.com/coffeehouse/mobile-apps/
- ConstantineXVI 14y agoUnlikely that such a thing would be deadly: - Square likely has an exclusive or near-exclusive deal with Starbucks. - Starbucks has fairly close ties to Apple, if such a system were coming they'd want to be sure Starbucks was involved (so they'd already know about it) - Assuming #2 is true anyway, that would make the $25 million investment incredibly risky; their stock would be murdered once the news came out. (Side note: assuming all of the above, this essentially kills any rumors of Apple buying Square; why would Starbucks bother investing in them and getting on the board?)
- dangoor 14y agoActually, if Apple had an interest in Square, wouldn't it then be a shrewd move for Starbucks to invest and get on the board? Buying into a company not long before it's acquired can be a great way to make a buck.
- brackin 14y agoThe interesting thing is at the Apple keynote they announced Passbook and showed a Starbucks card, the passbook product is lacklustre in comparison. This shows Apple is betting on this and Starbucks would rather go with a solution that fits in with their current message (using your name).
- ConstantineXVI 14y agoI'd totally forgotten about that demo. So either Apple doesn't have a first-party payment system in the works (I honestly don't blame them, it's hard business) that they've told anyone about, or they do and Starbucks said no thanks.
- uptown 14y agoInteresting move considering Starbucks already had a pretty effective mobile payment app. I use it regularly, and it works very very well.
- tehaugmenter 14y ago>iPhone, iPad, and Android devices Hate the double "and", listing should be alphabetical always! cough cough (not ocd) cough
- Retric 14y agoOrdering by relative importance is vary natural in spoken English. Depending on the type of writing / audience using the natural English rules vs 'proper' grammar is fine.
- vampirechicken 14y agoOkay. I've just not sure I want my name and face popping up on a console at Starbucks just because I'm walked in the place. Especially not unless I have HUD glasses that will tell me the cute barista's name.
- pat2man 14y agoYou have to enable the automatic feature, otherwise it's a manual slide to open a tab process.
- jeffgreco 14y agoDespite some reports, apparently Starbucks will not be supporting the Square pay-by-name/geofencing features: http://www.splatf.com/2012/08/starbucks-square-payments/ http://www.splatf.com/2012/08/starbucks-square-payments/