

Starbucks Chooses Square for Payments - MIT_Hacker
https://squareup.com//news/releases/2012/square-starbucks

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sown
I've heard of killer apps but I wonder if there's such a thing as a killer
vendor/customer.

I hate being too dumb to work at places like this. :(

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pbreit
I think you're right. Starbucks is absolutely the best possible
partner/customer to help Square make "Pay With Square" a broad reality.

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philip1209
Furthermore, I think that Starbucks _made itself_ the best possible
partner/consumer for "Pay With Square" by pursuing the Starbucks Card program
outside of traditional payment solutions. Ostensibly, they stumbled upon the
opportunity for such a non-traditional payment system, and thus validated the
Square strategy prior to the partnership.

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nandemo
Out of curiosity I looked up some of the earliest HN stories on Square, posted
about 2 years ago:

Square <http://news.ycombinator.com/item?id=970565> (0 comments)

Square Worth $40 Million Before Launch
<http://news.ycombinator.com/item?id=970880>

Jack Dorsey on Square, How it Works & Why it Disrupts
<http://news.ycombinator.com/item?id=971596>

Square: All Hype and Little Value for Small Business
<http://news.ycombinator.com/item?id=1148953>

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robbiemitchell
Ha. The last link (points to a FeeFighters blog post) has the hallmarks of a
"next big thing"--namely, dismissed first as a "toy".

cf. [http://cdixon.org/2010/01/03/the-next-big-thing-will-
start-o...](http://cdixon.org/2010/01/03/the-next-big-thing-will-start-out-
looking-like-a-toy/)

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uptown
Interesting move considering Starbucks already had a pretty effective mobile
payment app. I use it regularly, and it works very very well.

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MIT_Hacker
Link to an article that explains it as well:
[http://content.usatoday.com/communities/technologylive/post/...](http://content.usatoday.com/communities/technologylive/post/2012/08/starbucks-
to-accept-square-mobile-payment/1#.UCHlpMiNZho)

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trafnar
Interesting: "As 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."

Strange: "After ordering an item, they waive the phone on a scanner."

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Wingman4l7
Just a lazy journalist; spell-check won't fix heterographs.[1]

[1]: <http://en.wikipedia.org/wiki/Homonym#Related_terms>

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Cherian_Abraham
You already let the Barrista tag your coffee with your name at Starbucks. Its
only natural that now you get to pay for coffee with your name.

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dr_
This is a big deal. Quite honestly I've never understood the benefit of the
traditional Starbucks app, where you swipe your phone in front of their
scanner. How is This any different than giving them your cc or sbux card.
Paying by name is super convenient, and could help reduce the lines especially
with regulars. I've tried it recently at sight glass and it works great.

~~~
jarek
With the app, you don't have to carry the Starbucks card with you. Not a huge
deal but some people will enjoy one less card. With just the credit card, you
don't get rewards.

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theneb
Square have still yet to break into the European market despite claims from
their vanished blog that they were planning to in 2012. This was at the same
time as taking Branson on board.

It might stand that they're trying to strengthen their core business in the
USA, Starbucks could be a good gateway for them moving forward into other
countries.

~~~
brackin
It's almost impossible for Square to launch in Europe with their traditional
product (Swipe) but they probably could with Pay with Square.

Their European rival had to jump through huge technical hoops (payments
offsite, can't swipe, etc) to develop a product and it is a huge box off the
phone and they are now trying to jump through more as credit card providers
have raised their barrier.

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vampirechicken
Okay. I've just not sure I want my name and face popping up on a console at
Starbucks just because I'm walked in the place.

Especially not unless I have HUD glasses that will tell me the cute barista's
name.

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pat2man
You have to enable the automatic feature, otherwise it's a manual slide to
open a tab process.

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peppertree
I don't see how this benefits Starbucks.

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dantle
Me 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/>

~~~
Groxx
At 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.

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kingnothing
Square is probably charging cost, or even losing money on this one, just to
gain the market share.

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danudey
Loss 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.

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prawks
The real question now is how long will it be until Apple integrates it's own
credit card payment system into iPhones to kill Square.

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ConstantineXVI
Unlikely that such a thing would be deadly:

\- Square likely has an exclusive or near-exclusive deal with Starbucks.

\- Starbucks has fairly close ties to Apple, if such a system were coming
they'd want to be sure Starbucks was involved (so they'd already know about
it)

\- Assuming #2 is true anyway, that would make the $25 million investment
incredibly risky; their stock would be murdered once the news came out.

(Side note: assuming all of the above, this essentially kills any rumors of
Apple buying Square; why would Starbucks bother investing in them and getting
on the board?)

~~~
brackin
The interesting thing is at the Apple keynote they announced Passbook and
showed a Starbucks card, the passbook product is lacklustre in comparison.
This shows Apple is betting on this and Starbucks would rather go with a
solution that fits in with their current message (using your name).

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ConstantineXVI
I'd totally forgotten about that demo. So either Apple doesn't have a first-
party payment system in the works (I honestly don't blame them, it's hard
business) that they've told anyone about, or they do and Starbucks said no
thanks.

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jeffgreco
Despite some reports, apparently Starbucks will not be supporting the Square
pay-by-name/geofencing features: <http://www.splatf.com/2012/08/starbucks-
square-payments/>

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tehaugmenter
>iPhone, iPad, and Android devices

Hate the double "and", listing should be alphabetical always! _cough cough_
(not ocd) _cough_

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Retric
Ordering by relative importance is vary natural in spoken English. Depending
on the type of writing / audience using the natural English rules vs 'proper'
grammar is fine.

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zht
this is a huge deal

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hamey
Perfect deal for seeding Square broadly. Awesome!

