Starbucks says 1 in 6 payments already mobile

The company said it accounted for 90 percent of mobile payments in the US last year

Starbucks
The company that embedded wildly expensive coffee into your life now wants to make it fast, easy and nearly thoughtless to pay for it. For example, working with Square, Starbucks can turn your phone into a wallet that even tracks digital receipts (though we may not really want to know just how much we spend on latte and foam). Starbucks also launched what turned into the biggest LivingSocial promotion to date, selling 1.5 million gift cards in one day. Customers could also link the gift card to their loyalty card and keep on sippin'. Starbucks wants to be a "pioneer," says chief digital officer Adam Brotman, in blurring lines between technology, marketing and customer experience.
Starbucks The company that embedded wildly expensive coffee into your life now wants to make it fast, easy and nearly thoughtless to pay for it. For example, working with Square, Starbucks can turn your phone into a wallet that even tracks digital receipts (though we may not really want to know just how much we spend on latte and foam). Starbucks also launched what turned into the biggest LivingSocial promotion to date, selling 1.5 million gift cards in one day. Customers could also link the gift card to their loyalty card and keep on sippin'. Starbucks wants to be a "pioneer," says chief digital officer Adam Brotman, in blurring lines between technology, marketing and customer experience.

Starbucks says mobile payments are taking off in a big way and it's already handling almost 7 million a week at its U.S. coffee shops.

That accounts for 16 percent of all transactions at its stores and, the company says, meant it transacted 90 percent of all of mobile payments in the entire U.S. in 2013.

Starbucks says mobile payments are taking off in a big way and it's already handling almost 7 million a week at its U.S. coffee shops.

The company's slice of the national mobile payments market is sure to dip in the years ahead as other retailers start catching up to Starbucks, in part thanks to the recent launch of Apple Pay, but Starbucks says it sees no slow down in consumer adoption of its mobile payments technology.

Starbucks has integrated payments into its its own app, which allows customers to keep a prepaid Starbucks card on their phone, enabled with automatic refills when it gets low on cash, and keep a list of favorite drinks to make ordering easier.

Starbucks has apps for both Apple iOS and Android devices. On iOS, the prepaid Starbucks card is integrated with the phone's Passbook digital wallet app.

"What you're going to see in the years ahead will be a rapid acceleration in mobile device purchases and a continued significant migration away from bricks-and-mortar commerce," said Howard Schultz, CEO of Starbucks, in a conference call with investors Thursday.

Schultz said mobile users represented "a huge prize" for retailers and financial services companies and that's why there is so much interest in the sector.

"That's why every tech and financial service company in the world is today chasing the mobile payment opportunity," he said. But he said that while Starbucks doesn't have the hardware and software expertise of competitors, it has managed to do something that its competitors, so far, haven't: change consumer behavior.

"We've accomplished this by integrating the convenience of mobile payment to a compelling and enjoyable program that gives our customers rewards," he said.

Starbucks is seeing growth of 50 percent a year in mobile payments and looking ahead, Schultz said, "the real growth is yet to come."

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the newsletter!

Error: Please check your email address.
Show Comments

Blog Posts

How to become the customer experience custodian

The number one objective enterprises give for embarking on a digital transformation is to improve customer experiences with new engagement models, according to IDC’s 2017 global study.

Fear not: It's only a robot

Every time I pass through the automated border controls at the Sydney airport I walk away with a feeling of exasperation on the one hand and relief on the other. Exasperation, because the face recognition technology inevitably always fails to recognise me. Relief, because we seem to be safely years away from the Orwellian reality of states controlling every aspect of our lives; something the media is keenly warning us against each day.

Dan Kalinski

CEO, iProspect Australia and New Zealand

To DMP or not to DMP?

There are plenty of brands that can benefit from plugging into a data management platform. But should you engage an agency to run one or bring it in-house?

Ben Willee and Richard Taylor

Spinach Advertising

I worked at Momentum when the transformation started way back in 2013 (not 2015 as stated in the article). It was a painfully slow and co...

Jay

How Momentum Energy has transformed its entire business to be customer-led

Read more

Another buzzword thoughtlessly latched onto, without any thought for the implications on the organisations that have to lumber through th...

Tired

Rolling out agile marketing at Deakin

Read more

Useful., also don’t miss out on these 5 features of Adobe Experience Cloud - Visit here > http://www.softcrylic.com/b...

Sunil Joseph

Adobe debuts Advertising Cloud, Experience Cloud

Read more

the systems that run these things are teachable just like a car, theres stuff still yet to come out to bring up the automation grade, b...

Magnus Robert Carl Wootton

Fear not: It's only a robot - Big data delivery - CMO Australia

Read more

Marin Software’s digital marketing solution as a short way of streamlining and finding a scalable solution...

Al Drazhev

How BizCover is boosting search advertising success

Read more

Latest Podcast

More podcasts

Sign in