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Mobile Payments Revolution: Square, Starbucks Deal Kicks Off

Starbucks did $3.36 billion in revenue in its fourth quarter, with a significant portion of those transactions being credit and debit-card sales. Starbucks does not break down the percentage of payments.

Starbucks has its own mobile payment app, but the deal with Square takes the mobile payments industry on another level. "Starbucks has scale with ~7,000 U.S. stores (~4,000 licensed), and the partnership will likely be a key reference case for awareness of mobile retailing," JPMorgan wrote in a recent research note discussing the initial deal between Square and Starbucks.

It may take a while for consumers to adapt to the Square Wallet, but the future is in mobile payments. According to data from Ernst & Young, mobile payments are expected to be big business. The market is projected to reach a massive $245 billion by 2014.

Companies are fighting for everyone of those dollars, and the deal starting so soon after the announcement puts Square in an enviable position to capture a significant portion of that market.

Interested in more on Starbucks? See TheStreet Ratings' report card for this stock.

-- Written by Chris Ciaccia in New York

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