Global coffee shop chain Starbucks has invested $25m (£16m) in Square, an electronic payment service founded by Twitter co-founder Jack Dorsey.
Nearly 7,000 shops in the US will accept payment via the service in which credit cards are slotted into a small device connected to a smartphone.
Starbucks' head will become a director at Square as part of the deal.
Analysts said the deal has put pressure on Square's competitors in the sector, including Paypal and iZettle.
The devices - which typically plug into either a phone's headphone or charger socket - allow businesses to accept credit and debit card payments without having to invest in more expensive till systems.
The technology also allows users to accept card payments at festivals and other locations outside a permanent store.
'New visibility'
In a letter posted to Square's website, chief executive Mr Dorsey said the deal would help "accelerate" the product.
"When Starbucks builds the Square Directory into their apps and in-store Digital Network, it gives Square new visibility, driving more customers to opt-in to Square."
Starbucks' chief executive Howard Schultz added: "As the largest retail mobile payment platform in the US, we're excited and proud to accept payments with Square.
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