Square Lands Its Next Starbucks by Inking Deal With Whole Foods

Digital payments company Square has signed a deal to manage the payments process in portions of select Whole Foods Market stores in the U.S., the companies announced this morning. With the deal, Square has signed on its flashiest new customer since Starbucks began using Square in 2012 to process credit and debit card purchases.

While the Starbucks deal spanned 7,000 locations, the Whole Foods partnership is narrower in scope. Square will only be used at the specialty food and beverage counters that often line the inner walls of the upscale grocery stores. These counters will now be outfitted with iPads mounted in the Square Stand holder. The iPads will be running Square’s point-of-sale software and customers will have the option to pay for their orders with payment credentials loaded into the Square Wallet app on their mobile phones.

Previously, customers who ordered meals or drinks from these venues often needed to wait in the general checkout lines with other grocery shoppers.

Square is already handling payments in seven Whole Foods stores, and is expected to launch in dozens more in the coming months. Still, it’s not yet clear how many of Whole Foods’ more than 350 U.S. stores will eventually be running, even in part, on the Square payments system.

On the surface, the deal gives Square what many industry observers had expected the company to land more of following the Starbucks deal: Another high-volume, big-name customer as it positions itself for a possible IPO or acquisition. It also has the potential to give a small, but much-needed, marketing boost to the Square Stand, whose price the company recently slashed by 67 percent just a few months after bringing it to market.

For Whole Foods, the decision to let shoppers pay for purchases at these counters will undoubtedly alleviate some congestion at main checkout lines. At the same time, it’s not clear why the company chose to go with Square at these counters rather than its main point-of-sale system.

One educated guess: The current implementation of Square could be a test prior to a potential wider rollout within Whole Foods stores.

This article originally appeared on Recode.net.

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