Updated from 10:53 a.m. EST to provide analyst comments regarding deal in the tenth paragraph.
NEW YORK (TheStreet) -- The mobile payments industry went mainstream, as Starbucks (SBUX) and Square signed a deal to bring Square's service to Starbucks 7,000 U.S. locations. This could change the shape of the payments industry forever.
The deal allows all Pay with Square users to find their closest Starbucks in the Square Directory using either their iPhone or Android device. Not only does Square get $25 million in a Series D financing (reportedly valuing the company at $3.25 billion), but Starbucks CEO Howard Schultz is joining Square's board.
Square's CEO Jack Dorsey (who also co-founded Twitter), was notably excited about the deal.
"We're proud that Starbucks chose Square, as we share the value of always putting customers first," Dorsey said in the press release. "More than 2 million individuals and businesses can already use Square. This partnership will accelerate our ability to provide them with the tools they need to grow their business and thrive in today's economy."The Digital Wallet's Future is Now Companies like Google (GOOG), eBay (EBAY) (via PayPal), Visa (V) and MasterCard (MA) have brought their offerings to the customer with varying degrees of success (PayPal being the most well-known). But this deal has a huge impact on the industry,said Brian Sozzi, chief equities analyst at NBG Productions and Real Money contributor. "I think it's [Starbucks] trying to localize themselves. It's a great thing to be able to pay with the thing in your pocket. This transforms the industry."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV