Starbucks Corporation (SBUX) recently announced that as a part of its partnership with Square, Square Mobile Card Readers will now be available at its stores in the U.S. Enabled by its free software, Square Register, Square Mobile Card Readers will make credit card transactions easier and can be plugged into iPhone, iPad and Android devices.
In order to enable smooth credit and debit card transactions, Starbucks had entered into a partnership with Square in August 2012, a company that offers credit card readers for iPhone, iPad and Android devices. The Starbucks-Square partnership has already introduced the Pay with Square mobile application and the iPhone and Android Starbucks mobile payment applications. The partnership has allowed Starbucks customers to make quick payments at about 7,000 Starbucks stores.
Square Mobile Card Reader will serve small businesses by providing them with easy and affordable card processing services, thus liberating them from hassles associated with credit and debit card payments. Square Mobile Card Readers will significantly reduce the interchange fee associated with the use of debit and credit cards and enhance mobile payment services, thus encouraging business growth.
Starbucks connects with its consumers through its social, Internet, mobile, loyalty and cards programs. Starbucks confirmed that Starbucks cards are now used for 25% of the transactions in the U.S and the money loaded on the cards grew over 20%. The company expects 10% of the payments to be made using mobile application by the end of fiscal 2013.
A peer of Yum! Brands, Inc. (YUM), Starbucks carries a Zacks #2 Rank (Buy) for the near term.
We are positive about the company’s long-term plans. We appreciate Starbucks’ strong market position, new product launches, rapid growth in China as well as a solid turnaround in its U.S. business. Following the solid fourth quarter results, Starbucks upped its forecast for earnings, operating margins and global net new stores for fiscal 2013.
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