Credit cards and bank debit cards have practically replaced cash and checks, and smart business owners know the value of accepting credit cards. Many consumers like the convenience of whipping out their plastic to pay for items, and credit card transactions are often quicker than writing a check. But what if there were a faster way to process a transaction?
Starbucks’ deal with Square introduces a method that will take payment processing to a new level. Starting in the fall of 2012, Starbucks customers who download the Pay With Square app to their Android or iPhone can make digital payments using their mobile phones. What does this mean exactly? In other words, coffee drinkers can walk into one of 7,000 Starbucks stores nationwide and pay for their lattes — without reaching into their wallets.
Square is a service that businesses (or anyone) can use to accept credit cards anywhere. Products include the Square Card Reader, which lets anyone process credit card payments from a mobile device, and the Square Register, which can turn an iPad into a register. The introduction of Square has certainly transformed the way many businesses process payments, but consumers are no stranger to digital payments.
Many people use PayPal to receive and send money worldwide, and the availability of the PayPal app allows many to manage their transactions from their mobile phones. And while a number of retailers across the nation now accept PayPal at the register, the partnership with Square and Starbucks is unique. It’s the first time that many will use their mobile devices in a retail store. This will not only change the way people pay for coffee, but eventually the way they pay for everything.
The Pay With Square app offers convenience and speeds the pace at which merchants process payments. Merchants will now have the ability to identify customers by name, and this distinct feature will allow customers to make a purchase with their phones tucked away in their purse or pocket. For this payment method to work, customers must have entered their credit card or debit card number into Square and provided a photo of themselves. Once the initial setup is complete, customers simply provide their name at the register and wait for cashiers to confirm their identity. Funds are then debited from their bank accounts or charged to a credit card.
The Starbucks deal with Square is just the beginning and many big name retailers, such as Walmart and 7-Eleven, are transitioning to digital payments. Mobile payments offer speed, simplicity and convenience, which are factors that benefit both consumers and business owners. A large percentage of the population owns a smartphone, and many people download apps to pay their bills and manage their bank accounts. This highlights customer acceptance of apps to manage their personal finances, and indicates that consumers are open to changes that will simplify their finances. Whether mobile payments will completely replace cash and credit is yet to be seen. But as more and more retailers introduce mobile payment platforms, this will give consumers the opportunity to purchase anything, anywhere without their wallets.