Square is probably best known for giving small businesses a simple and relatively cheap way to process credit cards with its mobile app and dongle. But it's also moving further into the realm of pure mobile payments, and today it's added support for virtual gift cards through its apps. The customer-side Square Wallet app now offers gift cards from participating vendors like Starbucks; recipients save the cards to the Wallet app, then use them at the store. The merchant-side Register app, meanwhile, has been updated to accept the cards either through Wallet or through Passbook in iOS 6. There's also the option for them to read a printed QR code as a gift card.

Starbucks partnered with Square to accept mobile payments last month, but this new feature seems more attractive for people buying from smaller sellers, which may not have their own cards. Allowing Passbook integration could also make the cards more visible for people who may not yet be fully sold on Square Wallet.