Starbucks' Mobile Ordering Plans Won't Rely on Square

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Starbucks, an investor in Square, will not use Square's order-ahead app as the coffee chain pushes ahead with its own mobile ordering technology.

Starbucks will not accept payments through Square Order, an app that allows patrons to pay for an order before arriving at a store, ReadWrite reported today. Square also processes payments for Starbucks.

"Square continues to be an important partner to us, and we continue to collaborate with one another in a number of strategic areas for the business. We do not plan to adopt Square Order. Given our leadership in mobile payment, we opted to build our own mobile ordering solution, leveraging our own mobile app and world-class loyalty program," said Maggie Jantzen, a spokesperson for Starbucks, in an email.

In an email, a Square spokesperson said that Starbucks would still work with Square to process payments.

Square Order performs a function similar to Starbucks' own mobile ordering service, which is being tested in South Korea and Portland, Ore. Starbucks is pursuing other mobile commerce initiatives to build on the success of its mobile payment app. Starbucks told ReadWrite it would focus on its own mobile ordering system.

Starbucks made an investment in Square in 2012. At the time, analysts were bearish on the economic viability of the partnership.

There were technology challenges in the partnership as well. Starbucks has not adopted Square's signature mobile card readers to accept payments, and the Square Wallet option – which Square has since discontinued – has not always worked well at Starbucks.

"Starbucks went with Square because Square presented a unique tech at the time and it gave Starbucks something it could not get elsewhere," said Paul Martaus, a payments consultant and researcher, who said the mobile point of sale technology that Square helped pioneer has since become commoditized. "A lot has happened since then…Starbucks can use their own resources and can do their own thing."

Starbucks will also likely soon support Apple's mobile wallet, given Apple Pay's broad early impact on the retail mobile payment market, Martaus said.

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