Coffee drinkers will now be able to pay for their coffee while on the go. Starbucks (Nasdaq: SBUX) the number one chain of coffee shops, said it has invested $25 million in Square, the start-up specialist in mobile payments, which values the company at $3.25 billion.
According to franchisedirect.com, approximately 40 million people drink Starbucks at least once a week, this number however does not include the customers who come in to their local Starbucks franchise and purchase other goods or who simply come just for that "Starbucks experience."
Now that the Seattle-based chain has acquired Square, it will deploy Square's cell phone app, Pay with Square, by the fourth quarter in its U.S. stores. In effect, the square app will be takeover Starbucks' proprietary app that currently processes more than a million weekly payments.
Starbucks CEO Howard Schultz will become a director of the three-year-old San Francisco Company co-founded by Jim McKelvey and Jack Dorsey.
"Over a million people a week are paying with their mobile device at Starbucks," said Schultz "Total transactions (mobile, credit card, and cash) per week amount to 60 million worldwide."
Schultz says Square will begin popping up in stores nationwide before the holidays
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Previously, Square had mainly sold its app to small merchants, including coffee shops.
Other investors in Square include venture capital firms Sequoia Capital, Kleiner Perkins Caufield & Byers and First Round Capital. Starbucks shares fell 12 cents to $45.19 in early trading Wednesday.
Starbucks Corporation sowed its roots in the coffee bean industry in the early 1980s when the first coffee making and supply shop was established in Seattle and now is the world's leading coffee chain.
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