Starbucks Coffee Company announced today that it will use mobile payment company Square to process all U.S. credit and debit card transactions, beginning this fall. Starbucks is putting $25 million into Square as part of the deal, investing in a Series D round for the company. Howard Schultz, Starbucks president and C.E.O., will join Square’s Board of Directors. Co-founded by Jim McKelvey and Jack Dorsey in 2009, Square is backed by more than $160 million in venture capital, from investors including Sequoia Capital, Kleiner Perkins Caufield & Byers and First Round Capital.

PRESS RELEASE

Starbucks Coffee Company (NASDAQ: SBUX), with its leading mobile payment platform, and Square, the company revolutionizing everyday transactions between buyers and sellers, announced a broad innovative partnership to bring the best possible payment experience to both sides of the Starbucks counter.

The partnership terms include:

Customers will be able to use Pay with Square, Square’s payer application, from participating company operated U.S. Starbucks stores later this fall, and find nearby Starbucks locations within Square Directory;

Square will process Starbucks U.S. credit and debit card transactions, which will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs;

Using Square Directory, Starbucks customers will be able to discover local Square businesses — from specialty retailers to crafts businesses — from within a variety of Starbucks digital platforms, including the Starbucks Digital Network and eventually the Starbucks mobile payment application;

Starbucks will invest $25 million in Square as part of the company’s Series D financing round;

Starbucks chairman, president and ceo Howard Schultz will join Square’s Board of Directors.

By accepting Pay with Square, Starbucks is giving millions of customers another way to enjoy a quick and seamless payment experience at approximately 7,000 Starbucks stores. The partnership will also accelerate the ability of small businesses to grow with Square’s innovative technology and a stronger and more widely available Square network.

“As the largest retail mobile payment platform in the U.S., we’re excited and proud to accept payments with Square,” said Howard Schultz, Starbucks chairman, president and ceo. “The evolving social and digital media platforms and highly innovative and relevant payment capabilities are causing seismic changes in consumer behavior and creating equally disruptive opportunities for business. Both Starbucks and Square take a similar approach when building products and running our businesses, and together we can bring the best possible payment experience to Starbucks customers.”

“We’re proud that Starbucks chose Square, as we share the value of always putting customers first,” said Jack Dorsey, co-founder and CEO of Square. “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.”

Beginning this fall, in addition to the existing iPhone® and Android™ Starbucks mobile payment applications, Starbucks customers will be able to use Pay with Square to pay for their purchases at participating company operated Starbucks locations in the U.S. Customers simply need to download the Pay with Square application and set up an account on their iPhone® or Android™ device.

More than two-thirds of the 27 million small businesses in the U.S. currently do not accept credit or debit cards, in large part because of the expensive interchange fees associated with payment processing, cumbersome application process and required credit checks. Square enables merchants of any size – from sole proprietors to national retailers – to accept credit and debit cards.

“As an entrepreneur, I understand how critical it is for new businesses to have easy and affordable access to card processing while also giving customers a choice in how they pay,” Schultz continued. “Because Square’s revolutionary technology allows anyone to accept credit and debit cards, it gives entrepreneurs an essential tool to jump-start their business while providing existing small companies access to new customers. This development can play a vital role in spurring small business growth and hiring, which remains one of our country’s most important issues.”

About Starbucks Corporation

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest-quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.

About Square, Inc.

Square is revolutionizing millions of everyday transactions between buyers and sellers with its free credit card reader for the iPhone, iPad, and Android devices, allowing anyone to accept credit cards anywhere, anytime. Square Register serves as a full point-of-sale system for businesses to accept payments, track inventory, and share menu and location information. Pay with Square is the most seamless way to pay, enabling individuals to pay with their names at their favorite local merchants, discover nearby businesses, explore menu listings, and store receipts. Founded in 2009, and headquartered in San Francisco, Square is currently available only in the U.S.

PRESS RELEASE

I am pleased and proud to announce that today Starbucks signed up for Square.

Square began with a really simple idea: everyone should be able to accept credit cards. It should be easy and free to get set up, it should use simple technology people already own, and, most importantly, it should instantly adapt to any size business—from the person chasing a dream to the largest organization on the planet. By embracing Square, Starbucks has validated these ideas as powerful tools—not just for small businesses, but for smart businesses.

It’s amazing to think that Starbucks began as a single coffee shop in Seattle. The concept of taking a good idea and helping it grow is not foreign to them, and Starbucks doesn’t just view Square as the simplest way to accept payments. They see an opportunity to extend and accelerate a model they grew up with: the idea that business is local and that community plays a vital role in job creation and economic vitality. When Starbucks builds the Square Directory into their apps and in-store Digital Network, it gives Square new visibility, driving more customers to opt-in to Square. And with nearly 7,000 Starbucks stores soon accepting Square, these new payers will be able to find your business (including coffeehouses) and pay with their name, building community and creating value.

Our customers make us who we are, and we are proud of every single one of you—including our newest. Our promise to you remains the same: build simple, affordable, and fast tools that level the playing field for everyone. Thank you for helping us build Square. And please share your thoughts and tweets; I’m listening.