Jack Dorsey: Today Starbucks Signed up for Square

Post by ceejayoz » Wed, Aug 08, 2012, 5:22 PM UTC

jeffgreco wrote: post #167

ceejayoz wrote: post #151

Earlier quoted context omitted.

> As a marketing exercise alone it could be worth a fortune if it ends up putting Square's branding in every Starbucks. Very much so. People who see a Square dongle at the farmers' market will now go "oh, I saw that at Starbucks", not "that guy might steal my credit card with that".

Starbucks won't be using any Square dongles. I'd imagine there will be a small sticker at their normal POS. src: http://www.splatf.com/2012/08/starbucks-square-payments/

Post by alanh » Wed, Aug 08, 2012, 5:23 PM UTC

dclowd9901 wrote: post #162

faramarz wrote: post #14

This announcement makes me happy, for Square and Jack Dorsey as a young business leader. I love everything about the business idea, execution, design and tone of the overall strategy. Noteworthy points from the press release The partnership terms include: - Customers will be able to use Pay with Square, Square’s payer application, from participating company operated U.S. Starbucks stores later this fall, and find nea…

It occurs to me that, with Square as a partner, Starbucks stands to gain a lot from the partnership. If you think that most of their transactions are in small amounts (under $7 generally), and most of those transactions are done by credit card (I'm making a presumption about affluent individuals' purchase patterns), is it possible they're trying to turn the price they'd normally pay for transactions into investment c…

Post by apawloski » Wed, Aug 08, 2012, 6:03 PM UTC

lhnn wrote: post #172

Can someone explain this to a layman who "only" uses credit cards at the moment? How is whatever this is going to make my checkout at Starbucks quicker or more convenient than a card or a $5?

Post by abalone » Wed, Aug 08, 2012, 6:53 PM UTC

vitek wrote: post #147

jusben1369 wrote: post #120

Earlier quoted context omitted.

The largest retailers though can negotiate less than wholesale. But you raise a point. What attracted SB's to the deal? Lower transaction fees or incremental sales due to a simplified paying process? It can be both but it's probably not 50/50. I suspect one was the driver and the other gravy.

The largest retailers can negotiate the processing (merchant acquiring fees), but not the interchange. Components of CC fees are interchange (which goes to card issuing banks), processing (which goes to the merchant's bank), and association fees (which is how visa/mc/etc make their money). Interchange & association fees are fixed, processing is the most negotiable. That said, any >$1B retailer is paying too much if t…

Post by zevyoura » Wed, Aug 08, 2012, 9:11 PM UTC

jimmytucson wrote: post #72

jcdavis wrote: post #51

Earlier quoted context omitted.

Yes. The vast majority of payments I see in Starbucks in the US are via credit cards (or debit cards). With modern PoS systems, paying via card is faster and more convenient than cash, not to mention other benefits (rewards on cards, being able to better track spending)

I used to work at Starbucks (albeit going on 5 years ago) and although I don't have the exact statistics or a perfect memory, it was not a "vast majority". If I had to guess, I'd say probably something like 2/3. Maybe the ratio increases if you count Starbucks gift cards. Either way you look at it, Square's transaction volume surges with this deal. Good on both parties.