Winner Of Starbucks-Square Deal? The Mobile-Payments Market
Going deeper into Wednesday’s Starbucks-Square mobile-payment announcement, it’s obvious who the big winner is. And it’s not necessarily Starbucks or even Square. The coffee giant has partnered with fledgling mobile-payments vendor Square to bring smartphone purchases to its 11,000 U.S. stores. It’s a deal that adds weight to the argument that mobile payment –- using a phone in a store instead of credit or debit card –- is inevitable, so everyone should get on board now. Square has built a respectable business since 2009 convincing mostly mom-and-pop operations to accept credit cards using its low-cost reader that attaches to a smartphone. Starbucks did much more than agree to be a Square customer. It invested $25 million in the company, valuing the startup at $3.25 billion. To make sure Starbucks' interest is served, its CEO, Howard Schultz, will join Square’s board. Starting in the fall, people who install Square’s mobile app on their smartphone will be able to make purchases by...