SEATTLE – Starbucks is partnering with mobile-payment company Square to save money on credit- and debit-card interchange fees and to give customers a second option for paying for their lattes by cellphone.

As part of the deal, Starbucks will invest $25 million in Square, and Starbucks CEO Howard Schultz will join its board of directors.

Customers who have Starbucks cards already can deduct money from them using a Starbucks app on their cellphones in the U.S., Canada and the United Kingdom. Beginning this fall, customers will be able to use debit and credit cards as well, when Starbucks becomes the largest retailer to accept payments via “Pay with Square.”

People register their cards with San Francisco-based Square, then use their cellphones to access those cards when they pay.

The “Pay with Square” option will be available only at U.S. locations run by Starbucks.


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