Square has signed a wide-ranging agreement with coffee chain Starbucks and as part of this agreement, Starbucks will be able to accept payments from Square’s application. As part of this new deal, Square will also process Starbucks’ US credit card and debit card transactions.

Starbucks is going to invest $25 million in Square as well. Prior to the Starbucks agreement, Square was said to be valued at $3.2 billion valuation and was rumoured to have raised $200 million in funding.

This is a significant boost for Square which has been in competition with the likes of eBay’s PayPal division. Square, which was started to tap into the growing people-to-people economy, has broadened its ambitions. Signing up Starbucks can be viewed as a big part of the company’s desire to go after bigger retailers in addition to independent retailers.

The deal gives Starbucks another way to accept payments in store at its 7,000 US locations. It currently has a successful mobile payment system based on barcodes. But now, it will have a way for Pay with Square users to pay at the register using their phone. Pay with Square allows users to open a tab at a business and pay by just using their face, which an employee can recognize on their Square Register iPad app.