Author: Dan Gendro

The coffee chain giant will now be accepting WeChat smartphone transactions to pay for purchases.

The Starbucks QR code based payments are now being accepted in Chinese locations. The coffee chain announced that WeChat users will now be able to pay for their food and beverage purchases with the mobile app’s Weixin Pay.

The initial introduction of the QR codes will include around 2,500 of the company’s Chinese cafes.

To use the Starbucks QR code, customers must simply scan the code at the checkout counter. This is completed through Weixin Pay. The mobile payments technology makes it possible to carry out the entire transaction over the smartphone.

Customers will be using mobile payments at Starbucks as a result of a new agreement between the café and Tencent Holidings Ltd. This makes the coffee chain only the latest fast food company to offer Chinese consumers a mobile wallet payment option.

The Starbucks QR code has already proven to be very popular in other countries including the United States.

In China, mobile payments are becoming increasingly commonplace. Disney, KFC and Uniqlo already offer m-payment opportunities in their Chinese locations.

At the moment, there are approximately 200 million Chinese consumers using Weixin Pay and Alipay – Weixin’s rival owned by Alibaba Group Holdings Ltd. Consumers have embraced the technology due to the checkout speed it offers in-store.

That said, as popular as mobile payments are becoming in China, many foreign retailers are hesitant to introduce them. The main worry is regarding a customer privacy breach through the data collected during the transaction.

According to China Market Research Group managing director Shaun Rein, “Accepting mobile payment would unlock massive value for Starbucks.” He also added that “Since they couldn’t move customers through the line faster, they were losing 5 to 10 percent of business.”

The Starbucks QR code will provide precisely that opportunity. Customers can step up to the counter, order their beverage and scan the quick response code to verify and complete the transaction. This will also help to boost its strength in the competition with its top rival Costa Coffee. That company has been accepting mobile payments for more than a year.

An Adobe report has indicated that mobile shopping could be a great deal more but retailers are holding back.

While retail m-commerce has been moving forward, according to Adobe, it could be doing a great deal better. The firm’s data from Europe showed that traffic to retailer sites isn’t reaching its potential.

Europe saw an increase of 54 percent year over year in its mobile retail traffic from smartphones.

Adobe published its European retail m-commerce data in its 2016 Mobile Retail Report. Beyond traffic, smartphone based shopping has also led to an 89 percent increase in its revenue growth since last year. This is far greater than the increase in revenue growth experienced via desktop – at 8 percent – and tablets – at 10 percent.

Still, as much as the growth in revenues is significant, mobile commerce conversions aren’t nearly great enough to balance the slipping growth rates in the use of tablets and desktops. Europe saw a consistent increase in smartphone traffic throughout Europe. However, the average retailer experienced very little overall online traffic growth.

The boost in retail m-commerce isn’t actually driving up the use of online shopping overall.

On average, European retailers saw a year over year traffic increase of only 3 percent when taking all channels into account. Tablet traffic slid by 8 percent and desktop traffic fell by 7 percent. The smartphone growth rate was by far the highest but it was not adequate to make up for what was lost over other devices.

That said, the online retail revenue growth rate was healthy at 13 percent over last year. This was primarily built on the foundation of desktop purchases, which continue to represent the vast majority of online purchases.

Desktops brought in 74 percent of total online revenue, despite the fact that they represent a notably lower 58 percent of traffic. Clearly, the conversion rate over desktop is significantly higher than over other devices.

Smartphone retail m-commerce represented 12 percent of total online revenue but 27 percent of the traffic to retail sites across Europe. The average order value over desktop was also far greater than over smartphones. In that area, desktop outperformed smartphones by a sizeable 25 percent.