Starbucks continues to give mobile payments a buzz

 
Nov. 5, 2012 | by James Wester

The Starbucks mobile payment app keeps rolling along, setting the standard for other mobile payment applications.

During last week's Q4 2012 earnings call, company CEO Howard Schultz said the app is now being used more than 2 million times per week on average. Since its launch in January 2011, customers have used the app to make more than 100 million mobile transactions.

"We believe the rapid adoption of mobile gives us an opportunity to create a unique and much deeper relationship with our customers directly and in the moment like no other consumer brand or retailer," Schultz said on the call.

"We have the unprecedented ability to reach new customers, create awareness to new products, drive incremental transactions and explore new revenue streams in music and digital publishing," Schultz added.

While 2 million transactions a week is certainly impressive, to provide some context, Schultz said Starbucks served nearly 3 billion customers during its 2012 fiscal year.

In the call, Schultz also touched on Starbuck's recently signed deal with mobile point-of-sale company Square. He said the company had evaluated dozens of mobile payment solutions before signing a deal with Square. The result is a customer experience that fits with the company's approach, as well as lower transaction costs.

"By partnering with Square and accepting their innovative Square Wallet mobile payment app in our store, we are able to not only offer a complementary mobile payment solution to our apps, but we are also able to reduce our interchange fees for U.S. debit and credit card processing," Schultz said.

Schultz said the company is looking forward to integrating the Square Wallet app into its payment mix later this month. He also said that Starbucks is nowhere near finished with its mobile innovating.

"While we are proud of what we've accomplished thus far in mobile, we plan to continue to push the envelope in the future by adding features and interactive activity in such areas as tipping, mobile ordering and personalization," Schultz said. "I can assure you the best is yet to come in terms of the innovation that we are going to bring to the marketplace that creates separation, not only between us and other people in our space, but us and every other consumer and retail business," he added.

For more stories like this, visit the restaurant research center.

Earnings call transcript provided by Seeking Alpha.

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Topics: POS , Restaurants , Trends / Statistics


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