Following Square’s filing for an IPO, certain figures were disclosed in documents that revealed the payment processing startup was involved in a partnership that was quite unfavourable to it.
Square was signed up to process a part of Starbucks transactions three years ago, but when the startup filed for an IPO, the documents revealed it lost $71m in revenue over the course of those three years.
The partnership started when Starbucks invested $25m in the then rapidly growing startup, but rumours that it was heavily costing Square started very early on, it’s only clear just how bad it was now.
The deal was supposed to run until the third quarter of 2016, but it is now being cut short and Square is being replaced by JP Morgan. The bank’s global payment processing and merchant acquiring division, Chase Commerce Solutions, will process all non-mobile payments and U.S. retail card payment transactions in company-operated stores, as well as working on the rollout of chip-enabled payment terminals.
“Our new relationship with Chase Commerce Solutions, combined with the sophisticated chip enabled technology we are deploying across our U.S. store portfolio, lays the foundation for a coming wave of innovation in our digital payment ecosystem,These investments and innovations will both strengthen our payment platform and be increasingly accretive to our business over time,” said Kevin Johnson, president and chief operating officer, Starbucks.
Mobile transactions would continue to be serviced by First Data.
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