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Starbucks to Drop Square Wallet and Payments Next Year

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The coffee chain focuses on growing its own mobile payment app.

Starbucks spent the better part of 2014 beefing up its mobile app, adding everything from an order ahead feature to mobile payments and gratuity. So Square, a leader in mobile payments that has benefited from a two-year partnership with the coffee giant, shouldn't be surprised that Starbucks is ending its use of its services. As ReadWrite first reported, Maggie Jantzen, a spokesperson for Starbucks announced the news late last week: "Starbucks is not adopting Square Order in our stores. We opted to build our own mobile ordering solution, leveraging our own mobile app and world-class loyalty program."

"Starbucks is not adopting Square Order in our stores. We opted to build our own mobile ordering solution..."

Meanwhile, as PC Magazine notes, Square is keeping things vague. Says Square spokesperson Johnny Brackett, "Starbucks continues to be a partner of ours and we continue to process their payments and work closely together. We have nothing to share regarding Starbucks offering Order."

Clearly, Starbucks' move to ditch Square was motivated by the fees associated with mobile payments. Business Insider did the math: In 2013, the Starbucks app apparently "accounted for 90% of the $1.3 billion [Starbucks] made through in store mobile payments," meaning the coffee chain "processed $1.17 billion in mobile transactions that year." With Square out of the picture, Starbucks can now keep every dime.

It's no secret that chains are looking at a future full of mobile ordering and payment processing. This year, Dairy Queen also launched its own mobile app. While McDonald's partnered with Apple Pay, Burger King opted to integrate PayPal into its new app. And, Taco Bell's new app includes unlimited menu customization options in addition to a mobile payments feature — a boon for a company that appears to be riding a wave of popularity. Even the Girl Scouts have an app now.