Thursday, November 8, 2012

Mobile: Square Launches at Starbucks — You Think You Won’t Use It, But You Will

Mobile: Square Launches at Starbucks — You Think You Won’t Use It, But You Will:

Square Launches At Starbucks
Photo: Alex Washburn/Wired

Starting today, the mobile wallet app from Square — Twitter inventor Jack Dorsey’s other company — becomes the newest way to pay at 7,000 Starbucks across the U.S. On the surface, this might not seem like a big deal — the same old scanner reads a QR code on your phone’s screen, just like with Starbucks’ own app.
But what we’ve got here is a good old-fashioned tipping point. You don’t pay for things with your phone at the checkout counter now. But after this you will.
Some quick background: Square first made a splash in 2009 when it started as a company offering a minimalist credit card reader you can plug into the headphone jack of your iPhone. Three years later, you no longer have to bring cash to the farmers’ market. Square also has a wallet app to which you link a credit or debit card, then use instead of cash or plastic anywhere that uses Square to process payments.
For a while, Square was the darling of the San Francisco startup scene (it’s still pretty darling). Its product was pretty, its user-centered focus on design was compelling, and its boss had recently created a new form of global communication. Then this past August, Square dove deep into the mainstream, announcing it would become the sole processor of credit and debit card payments for Starbucks in the U.S. Customers would also be able to use Square Wallet to pay.

In an impressive feat of logistics, assuming it works, Starbucks says paying with Square is going live today at all U.S. locations. If you have Square Wallet on your iPhone or Android handset, Starbucks will now show up on the list of merchants, assuming you’re close to one, which you probably are.
For geeks already steeped in Square, the initial version of Square-at-Starbucks might disappoint. The coolest part about paying with Square at most merchants is the way you “open a tab”: Tap the store or restaurant in the app before you even show up, and your name and photo pop up on their Square-enabled register. You go in and place your order. They see it’s you from your picture and charge your account. You never hand them or scan anything out of your pocket at all.
Rather than scale up such a radical change for the initial launch of Square at Starbucks, tapping on your local Starbucks store in the app will simply bring up a QR code you scan at the register. Starbucks’ own app works the same way, but there’s a key difference. The Starbucks app works like a gift card that you reload whenever its value gets close to zero. With Square at Starbucks, scanning your phone is the exact equivalent of swiping your credit or debit card. It’s a subtle distinction, but it makes all the difference.
Here’s why: With the Starbucks app, paying with your phone still has the potential to stay just a novelty. It’s just what you do when you’re at Starbucks, maybe because you like the convenience, maybe because you like to earn reward points, and you must consciously take the second step of reloading your Starbucks “card” to keep using it. But with Square, there is no second step. You’re just paying. Another feature of Starbucks’ wallet — the feature Square has been citing to assuage worries of the indie merchants that were Square’s early adopters — is the directory of other nearby Square-enabled shops close to the one you’re visiting. Now you have a list of all the places that Square on your phone works. It’s an open payment platform, versus Starbucks’ own Starbucks-only app.

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