Starbucks Invests $25 Million in Mobile-Payment Provider Square

Square's software will similarly let Starbucks customers pay by scanning an enabled phone -- only Square will now process the payments, Mr. Dorsey said. Square typically charges merchants a flat rate of 2.75% to process credit-card transactions.

"We've always built the company and the technology around the idea of it being used by an individual all the way up to the largest organization in the world," Mr. Dorsey said in an interview. "It should scale effortlessly between that range." The market for mobile payments may top $170 billion in transactions by 2015, compared with about $60 billion last year, according to Juniper Research Ltd.

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