Square Rolls Out Order App, Targets Coffee Shops

Square Inc. is rolling out a new mobile application aimed at satisfying caffeine addicts who are in a hurry by taking much of the waiting and paying out of the purchase of a cup of coffee.

The Square Order app will tell a barista to start preparing a brew as soon as a user approaches a shop. The customer then picks up the drink and walks out, with the order and payments handled automatically in the background. The app, available for iPhones and Android-based smartphones, will be accepted by hundreds of retailers in New York and San Francisco, Square said today.

Blue Bottle Coffee Inc. will be one of the first businesses to use Square Order. Square didn’t name any other coffee companies, including Starbucks Corp., which invested $25 million in Square two years ago and adopted its payment system in 7,000 stores. Square Chief Executive Officer Jack Dorsey, who is also Twitter Inc.’s chairman, has been seeking ways to expand Square’s sales as he funds operations via investment rounds.

“We would love for Starbucks to join Order, but really, that’s a question for Starbucks,” said Johnny Brackett, a spokesman for San Francisco-based Square.

Starbucks had conversations with Square about the app, yet decided to build its own to ensure it has adequate scale and includes its own customer-loyalty programs, said Linda Mills, a spokeswoman for the Seattle-based coffee chain. Starbucks will unveil its own app later this year, she said.

“It was something we really needed to develop on our own,” Mills said.

Warming Up

Merchants using Square Order will mainly be coffee houses, although some takeout restaurants are also participating, Brackett said. Square plans to introduce the app in other markets in the future, he said.

Square Order is part of the startup’s ambitions of becoming part of consumers’ daily routines as it competes with PayPal for market share. EBay Inc. last week announced plans to spin off PayPal as a separate company next year, which analysts say will heat up competition in mobile payments. PayPal also has an order-ahead option, which is used by thousands of merchants worldwide, including Jamba Juice.

Coffee and snack shops in the U.S. will generate $30.2 billion in revenue this year, with sales projected to grow 3.8 percent annually through 2019, according to IBISWorld Inc., an industry research firm in New York. Starbucks has 38 percent of the market, followed by Dunkin’ Brands Group Inc.’s 26 percent, according to IBISWorld.

“We are excited to partner with Square to continue to offer a quality experience for our guests while serving coffee in a much more streamlined fashion,” James Freeman, founder of Oakland, California-based Blue Bottle, said in a statement.

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