Tag: starbucks mobile transactions

Starbucks finds success on the mobile payments front

Mobile payments are becoming more common in the U.S., especially as businesses show interest in new forms of commerce and begin catering to consumers with smartphones and tablets. One company has managed to establish a powerful lead on the mobile payments front and may serve as a powerful example of what can be accomplished by engaging mobile consumers. That company is Starbucks, which has been involved in mobile commerce since teaming with mobile commerce firm Square only a few short years ago.

10% of company’s transactions come from mobile devices

Starbucks and Square have developed a mobile payments system that leverages QR codes and, in some cases, NFC technology to allow consumers to pay for products with nothing more than their smartphone or tablet. During the early stages of the company’s endeavor, Starbucks did not expect to see a great deal of support for its mobile commerce initiative. Consumers, however, proved that they were more than willing to embrace the service being offered by the company. Now, mobile payments represent 10% of the company’s total transactions in the U.S.

Consumers flock to Starbucks’ mobile commerce service

Part of the reason consumers seem to enjoy mobile payments is due to the convenience that it represents. Consumers can pay for nearly anything by simply waving their mobile device at a payment terminal. Starbucks also offers a reward program for those that make mobile payments, further piquing the interest of consumers. The company notes that many of its consumers happen to be tech-savvy individuals that are interested in engaging in new technologies they are not necessarily familiar with. This may be yet another reason why Starbucks has managed to find success in the mobile commerce arena.

Many consumers concerned over security of financial information

While mobile payments have been growing popular in the U.S., many consumers have shown resistance to the idea of mobile commerce. Several platforms designed to cater to this sector, such as Google Wallet, have failed to win any significant support from consumers. Many people cite security concerns for their lack of interest in mobile payments, while others consider mobile commerce to be nothing more than a passing fad.

One in ten purchases made in the coffee shops across the United States are made using smartphones.

According to the coffeehouse chain’s own statistics, which have just been released, mobile payments are now accounting for over ten percent of all transactions that are made within its American stores.

The purchases are being made over Android, iPhone, BlackBerry devices in the United States.

The Starbucks Card Mobile App allows customers in the coffee stores to be able to pay for their coffees and treats through the use of their smartphones with mobile payments based on barcode scans at the checkout. The chief financial officer at Starbucks, who is also the chief accounting officer, Troy Alstead, explained that this method of paying for products is “a very sticky transaction by virtue of the fact that people have preloaded their money that we hold for them in anticipation of that coming transaction.”

Alstead explained that mobile payments also provide the opportunity to gain an understanding of their customers.

He explained that by using mobile payments, it gives Starbucks “an ability for us to harvest that information and really determine the most effective ways over time to understand our customer to target products toward them and the appropriate ways to reach them with our messages.” He also noted that in total, the transactions made using the Starbucks Card – using both the mobile app and the actual plastic card – make up nearly a third of all of the purchases made in the United States.

Recently, the company said that the card is now making up approximately 4 million mobile payments transactions every week. This is twice the 2 million transactions that were occurring by the end of 2012 every week. Furthermore, the purchases made over the Starbucks Card Mobile App are now making up a much larger proportion of North American digital wallet transactions than their primary rivals, such as the high profile Isis and Google Wallet. This, according to data issued by Berg Insight earlier in June.

CEO of Starbucks, Howard Schultz, has stated that the company will be boosting its m-commerce services throughout the year and that mobile payments are only expected to grow.