A mobile payment app is getting popular with Starbucks.  The Seattle-based coffee maker’s 18 month old program is the largest in the North America according to Bloomberg Businessweek.  The company is making a huge investment in a startup technology company Square who is processing more than a million phone transactions per week.  Starbucks is using mobile payments since 2009 and it is tied to customer’s credit card.

Why Starbucks interested in the mobile payment? There are several reasons.  It is cheaper than most traditional credit card payments.  The credit card companies charge up to two percent and Square charges less than that.  Mobile app could help to move the line few seconds faster especially during peak hours.

Target, Best Buy, Wal-Mart and many others are following Starbucks and creating their own mobile apps.  One area that may get hit by the new development is the current payment processors such as eBay’s Pay Pal, Google, and ISIS.  It could also help the retailers renegotiate with current credit card companies for lower processing fee charges. Also, retailers will have a direct way to communicate and promote their businesses using a mobile phone.  This is welcome news for many retailers.