The bottom line is that the current debit card system in this country is a broken market.

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The company has introduced its own debit-card system in some stores and is investigating wireless systems where radio tags placed on products are automatically read when a customer is ready to leave a store.

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The key difference is that Square will allow the customers to pay with credit and debit cards on their phone, while Starbucks's current system only allows consumers to use their Starbucks debit card to pay.

WSJ: Starbucks to Use Square Inc.'s Mobile-Payments Technology