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I don't see how this benefits Starbucks.
by peppertree 14y ago
I 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.
- peppertree 14y agoBut square collects 3%, which is much higher than most merchant accounts.
- 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.