Starbucks' new mobile phone pay option

9 Aug 2012, 11:29 am   -   Source: AAP

Partnering with mobile payment Square, Starbucks will enable its customers to pay using their mobile phones, and will save processing fees in the process.

Starbucks is partnering with mobile-payment company Square to save money on credit- and debit-card interchange fees and to give customers a second option for paying for their lattes by mobile phone.

As part of the deal, Starbucks will invest $US25 million ($A23.74 million) in Square, and Starbucks chief executive Howard Schultz will join its board of directors.

Customers who have Starbucks cards already can deduct money from them using a Starbucks app on their mobile phones in the US, Canada and the United Kingdom.

That app was launched in January 2011, and handled more than one million transactions each week, said Adam Brotman, Starbucks' chief digital officer.

Beginning this northern autumn, customers will be able to use debit and credit cards as well, when Starbucks becomes the largest retailer to accept payments via "Pay with Square".

People register their cards with San Francisco-based Square, then use their mobile phones to access those cards when they pay.

The "Pay with Square" option will be available only at US locations run by Starbucks.

That means it excludes most shops in airports, grocery stores and other such establishments.

Square also will become Starbucks' processor for US debit- and credit-card transactions, even when a card is swiped manually. It will charge Starbucks lower fees on those transactions than the company currently pays, Brotman said.

But he declined to specify how much the chain will save, saying only such fees are "significant".

Starbucks customers who use "Pay with Square" will receive more face time with baristas, Brotman said, because workers won't have to swipe cards, and customers won't have to sign receipts.

"It helps humanise the transaction," he said.

"It allows them to maintain eye contact."

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