Category: Mobile Payments

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.

Cayan data revealed that Americans didn’t turn to their smartphones to complete transactions very much.

Transaction processing firm Cayan showed that in store mobile payments in the United States were low on Black Friday. Fortune Magazine reported on the data and indicated that even though mobile wallet use is rising, it is still tiny. That payment method represents only a very small percentage of the overall total.

In fact, the mobile wallet use in store on Black Friday made up only 0.6 percent of sales.

The Cayan in store mobile payments data suggests a 100 percent year over year usage increase. However, it still shows that the percentage it represents of the total is only just a fragment above being entirely insignificant. The only reason that percentage meant anything at all was because the total sales on all payment methods on Black Friday was such a large figure.

Despite that fact, this makes it very clear that mobile payment adoption remains an exceptionally slow process. It is far from being mainstream as of yet.

Other data has shown that some in store mobile payment methods are more successful than other.

PYMNTS and InfoScout data showed that the use of the Apple Pay mobile wallet is actually declining in popularity. Their data revealed that over the last year, the growth rate for usage has slowed down.

Data from October 2016 showed that only 23 percent of consumers with an appropriate iPhone had actually tried the mobile wallet. That was essentially the same statistic that was recorded back in March 2016.

Moreover, mobile wallet use while in-store has not been doing much better. It has not been keeping up with the rate of growth of m-commerce as a whole. Still, even though there is a low conversion rate, PayPal recorded some strong figures over the holiday weekend that launched the shopping season. About 1 in 3 online purchases using PayPal were made over mobile.

Similarly, Adobe recorded that 45 percent of traffic to retail sites came from smartphones and 25 percent of e-commerce sales were from mobile devices. This suggests that customers are using their smartphones, they simply aren’t using in store mobile payments quite yet.