Why Square's Deal With Whole Foods Is Bigger Than You Think

Updated from 10:45 a.m. to include comments from Whole Foods CEO in the tenth paragraph.

NEW YORK (TheStreet) --  If you thought mobile payments were going away, think again. They're about to get bigger.

San Francisco-based mobile payments company Square has signed a deal with Whole Foods Markets (WFM) to bring Square Register and Square Stand to select Whole Foods stores around the country. Users also can use their smartphones to pay with Square Wallet, making shopping for goods that much easier, faster and convenient.

Whole Foods has approximately 350 stores around the country, and a press release issued Tuesday didn't say how many stores would be part of the initial deal. It did mention that several Whole Foods locations will act as "lab stores," allowing for more testing to improve the customer experience, and respond and react to the changing needs of shoppers' habits.

Venues inside Whole Foods, such as sandwich counters, juice and coffee bars, pizzerias, and beer and wine bars, will allow customers to skip the usual checkout lines for those goods, and thus reduce wait time for customers, as well as potentially increase sales for Whole Foods.

Shares of Whole Foods were higher in Tuesday trading, gaining 0.95% to $55.48 ahead of first-quarter earnings.

"Together with Square, we'll deliver options to expedite checkouts, and we look forward to developing new concepts to further simplify and improve grocery shopping," said Walter Robb, co-CEO of Whole Foods, in the press release. "Square's forward-thinking vision and technology makes them an ideal partner to create a convenient, responsive experience for our customers."

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