Square payments coming soon to a Whole Foods near you

Caitlin McGarry

Square's white plastic smartphone plug-in is a common sight at coffee shops and farmers markets, where mobile payments make everyone's lives easier, but not so much at large chains. Now Square is partnering with Whole Foods to place a more sophisticated version of its card reader, the Square Stand, at food and beverage outlets — bakeries, sandwich counters, wine bars — inside the market's stores.

This is Square's second major deal, and its first with a grocery chain. The company, founded by Twitter chairman Jack Dorsey, made headlines in 2012 when Starbucks announced that it would be switching to Square to process payments for all its lattes, plus investing $25 million in the mobile payment startup.

Square will replace checkout lines and cash registers at some of the eateries inside Whole Foods, but organic produce fiends will still have to stand in line to pay for their overpriced apples. Shoppers who have the Square Wallet app can skip the line if they pay with their phones. But so far, only seven stores scattered across the U.S. are using Square in San Francisco, New York, Austin, and Florida. It's unclear how many Whole Foods locations will start using Square.

The release announcing the partnership noted that some Whole Foods locations will be "lab stores" that will be testing "additional innovations designed to enhance customer service and cater to the changing needs of shoppers." Perhaps Whole Foods has plans to make its stores more tech-savvy that go beyond Square.

The big question is: What took Square so long to nail down another major retailer? After Starbucks signed on, it seemed like other chains would follow suit. Instead, Square returned to the drawing board to redesign Reader and Register, its card reader hardware and point-of-sale solution, and to introduce Square Stand, which turns an iPad into a self-service checkout kiosk. The company also launched Square Market, a way for local businesses to sell their wares online.

Now that its services for small businesses are built out, Square can turn its focus back to a widespread retail roll out. Farmers and artisans are great customers, but Square needs more high-profile customers if it's planning to ever go public.