Photo: Paul Davidson/Flickr
Mobile payments company Square and coffee giant Starbucks announced a surprise joint venture today that will eventually let all Starbucks customers pay without using cash or a credit card.Instead, payments will be made using an app called Pay With Square.
Pay With Square is a bit different than the original Square app that lets you accept credit card payments on your smartphone or tablet using a special dongle.
Instead, you input your credit card information into the app—just like you would with Amazon or any other ecommerce site—and use your phone to make payments. The app only works in stores that sign up to take payments with Square. (Don’t worry, the app will help you find nearby locations that participate.)
When you walk into a store that accepts Pay With Square, you open a tab with the app, or you can set it to automatically open a tab whenever you walk in. The app then uses your phone’s GPS and alerts the cashier’s computer that you’re in the building. (The cashier will also see your profile photo.)
When it comes time to pay, you just have to tell the cashier your name and he or she will process the payment. You don’t need to show your phone or credit card.
Until now, Pay With Square was mostly used by smaller, independently-owned stores. But with Starbucks on board, Square will be in thousands of locations at a major retailer. That’s a big deal.
But there’s a caveat. As Dan Frommer reports, Starbucks will initially require you to show a barcode on your phone to the cashier so he or she can scan it. You won’t be able to take advantage of the hands-free payments that other Pay With Square partners allow. Yet.
That makes sense, because it’s a huge, expensive ordeal for Starbucks to rip out all of its point-of-sale systems and replace them. The barcode system works with existing equipment.
So at the end of the day, paying with Square on your phone at Starbucks will be a very similar experience as paying with the official Starbucks app for now. The only difference is you can use a real credit card, not a pre-loaded gift card.
But from the way the companies are talking, it seems clear that will change as they figure out how to make Pay With Square’s tab feature work at Starbucks.
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