Prior to the recent launch and release of Apple Inc’s Apple Pay, Starbucks is already into mobile payments. In fact, the giant coffee chain said it is already handling about 7 million mobile payment transactions each week in all its locations across the US.
That accounts for about 16% of overall transactions at its nationwide stores. It also accounts for up to 90% of total mobile payments in the country in 2013.
However, the company admits that it expects its slice of the market for national mobile payments to decrease in the coming years. That is because many other retailers are now catching up to offer mobile payment options. Starbucks remains optimistic though that despite the presence of Apple Pay, consumer adoption of its own mobile payments technology would not slow down.
Starbucks’ mobile app
Interestingly, Starbucks has created its own mobile app, where a special payment system is integrated. It enables its customers to maintain a prepaid card on their smartphones. Those come with automatic refills that can be claimed when the account becomes low on cash. It also keeps a list of a user’s favorite Starbucks drinks to facilitate easier and faster ordering.
The company maintains apps for iOS and Android devices. Not surprisingly, the mobile prepaid Starbucks account on iOS comes integrated with the Passbook digital wallet of the phone. Such special feature does not exist on the Android version.
In a statement, Starbucks CEO Howard Schultz said that consumers should expect rapid acceleration of mobile payments and transactions in the coming years. He added that mobile customers now represent a significant market portion for both retailers and financial service providers.
Schultz reiterated that financial services and technology companies are now chasing after mobile payment opportunities. Even if Starbucks does not hold hardware as well as software expertise unlike many of its rivals, the company has been continuously enjoying success when it comes to changing consumer behavior, which is something that the competition is yet to accomplish.
Starbucks expects growth of mobile payments to further grow by up to 50% per year. Schultz concluded that real growth in mobile payments is yet to arrive.