Starbucks launches largest mobile payment program in the US

By on January 19, 2011, 10:42 AM
Starbucks has started accepting mobile payments. Customers can use the Starbucks Card Mobile app on their iPhone, iPod touch, or BlackBerry at nearly 6,800 company-operated Starbucks stores in the US plus more than 1,000 outlets inside Target stores. To pay with their phone, app users simply select "touch to pay" and hold up the barcode on the screen to the 2D scanner at the register. The app also lets users manage Starbucks accounts and find nearby stores.

To start using your device as tender, you can download the app now for iOS and BlackBerry. An Android application is also said to be in the works, but the company has not yet given a release date, and there's no word yet on plans for a Windows Phone version.

The Starbucks Card Mobile payment program was piloted at Target stores and select San Francisco, Seattle, and New York Starbucks locations in September 2009. Starbucks Card Mobile lets users add their Starbucks Cards, track rewards, and reload cards as needed via PayPal or a credit card. In testing, Starbucks found that Starbucks Card Mobile was faster in application speed, transaction speed, and total customer wait time than all other ways of payment. After the coffee house realized that one in five transactions are made using a Starbucks Card, that its customers frequently use their smartphones while waiting in line and carry their mobile phones more often than a wallet or purse, it decided to put the two together.

Starbucks is using its own custom-built technology, choosing barcode scanning over near field communication technology (NFC) because the latter has limited availability. The company may go NFC once there are enough mobile customers using it, but in the meantime it wanted to roll out mobile payments. With the launch, Starbucks claims to be operating the largest mobile payment program in the US.

User Comments: 9

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Rick Rick, TechSpot Staff, said:

tarbucks found that Starbucks Card Mobile was faster in application speed, transaction speed, and total customer wait time than all other ways of payment.

I find that very difficult to believe, because I imagine the process as: people taking their phones out, unlocking it, finding the app, waiting for the app to open and confirming the transaction. Some will undoubtedly have issues in between, such as the confusion of bluetooth being disabled and having to arrive at the conclusion that the bar code scanner must be used instead... which probably doesn't work 100% of the time with a smudgy, finger-grime riddled phone screen anyhow.

I'm not saying the technology is bad -- it's certainly cool and even useful -- but it is hardly worthwhile for anyone carrying a credit card.

Security is a whole other discussion. I assume NFC via bluetooth is encrypted etc... But it isn't hard to imagine an effective spoof or other hack all done in the comfort of the Quiznos next door.

Guest said:

NFC does not have to be bluetooth.

Contactless payment systems have been in use all over the U.S. for many years, just not widely utilized by the public due to lack of education and marketing on the part of the banks.

Go to any McDonalds, or popular pharmacy/convenience store chain and you will see contactless payment terminals. Most people use their mag stripe cards on them without realizing that if they actually have the chip in their cards, they can just tap and pay.

As for security, it's much more secure than mag stripe or bar code.

Guest said:

Hi Rick,

You are correct for first time users, but not for repeat offenders. Once people figure out you only need to have the barcode on the screen at the time of purchase, you should see how fast it goes. People are all playing with their smartphones in line anyway, as they get their coffee they just hold the phone up to the barcode scanner - transaction complete.

It is actually very efficient. It won't work for my mother, but for most of the yuppie crowd already heads down over their smartphone, it works wonders.

yRaz yRaz said:

Rick said:

I'm not saying the technology is bad -- it's certainly cool and even useful -- but it is hardly worthwhile for anyone carrying a credit card.

I'm going to stick to my card. This seems kinda silly. I have my money in my bank, I don't want to move that to my phone bill. I guess it could have some novelty to the higher-ups, but this doesn't seem practical.

Mizzou Mizzou said:

My purchase at Starbucks consists of handing the cashier some cash and thowing the change in the tip jar ... quick and simple.

Benny26 Benny26, TechSpot Paladin, said:

It does seem kinda silly..Lots of companys try different methods of payment, but people always come back to hard cash for small payments like coffee and stuff.

Leeky Leeky said:

I like the idea of contactless payment using a card, but I think this is a step too far - Your just moving the bills over to your cell (or mobile in my case) phone instead.

princeton princeton said:

Too bad Canadians don't even know what NFC is. Sucks to be behind the world.

Scoutk21 said:

All of this effort wasted on creating a profile just to let you know that we are the ones behind. Please take some time to read up on EMV technology before you go on about Canada's payment system. I would even get as bold to see how they are handling their interchange rates which has obviously been such a success for our Federal Reserve to handle. They have move to micro chip technology when we are still using the mag strip on our cards.

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