Forget Apple: Starbucks wants to rule mobile payments

Oct. 31, 2014 | by Will Hernandez

Starbucks intends to lead the industry in mobile payments and now has some impressive numbers to back those ambitions.

United States consumers made $1.3 billion in mobile payments in 2013 and the coffee retailer accounted for over 90 percent of those purchases, according to CEO Howard Schultz. Starbucks now accepts seven million mobile payments per week as 16 percent of its U.S. sales occur this way.

"No company and no retail store, domestically or internationally, even comes close," Schultz said during the company's fourth quarter and full-year earnings call. "And while that figure has been growing by almost 50 percent per year, the real growth is yet to come.

"Starbucks Coffee Company has cracked the code at tying mobile payment to loyalty, and we are now receiving great interest in partnerships from mobile payment companies who see the value of our rewards program and the mobile payment behavior we have established."

This is not the first time Schultz or other Starbucks' executives revealed potential plans to white-label its mobile product to other retailers and technology companies.

In April, Schultz said during an earning call that tech companies and national retailers approached Starbucks about duplicating its mobile efforts for others. Adam Brotman, the company's chief digital officer, told Re/code in July Starbucks was in discussions with other retailers about a scheme that would enable consumers to use the coffee giant's app to pay for items at other merchants.

Starbucks appears closer to moving towards that plan, but it will be careful about how it approaches such partnerships.

"We will play our hand wisely, with a long-term view, carefully choosing our partners in how we leverage our assets to take advantage of the revenue and profit opportunities in loyalty and mobile payment ahead," Schultz said. "But, I can ensure you, that Starbucks will have a major role to play, both inside and outside of our stores, as the nascent mobile payment industry evolves."

Mobile ordering is next on the docket for Starbuck as the company plans to add the feature nationwide next year, Schultz said during the call. He added the company wants to start delivering food and drink to mobile device users towards the end of 2015.


Topics: Contactless / NFC, In-App Payments, Loyalty Programs, Mobile/Digital Wallet, Mobile Marketing, Restaurants, Retail

Companies: Starbucks



Will Hernandez
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago. View Will Hernandez's profile on LinkedIn

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