Starbucks offers Mobile Payments to Customers

In a very interesting move, Starbucks has introduced a mobile phone payment system to over 6,000 of their US stores. Customers with a Starbucks card can use a mobile app to make a payment on the card. They simply show a barcode at the till and the payment is taken. They can top up their card via PayPal.

With the world of mobile retail hotting up, there will be greater demand from consumers to make payments through their phones. However, there is a battle going on between various providers. In the UK the operators put their energy into PSMS and the web-based system PayForIt. However these payment methods have a limited future. It limits the kinds of things that can be paid for (mobile or web content only) and the high operator charges make it prohibitive for many brands. Looking ahead the future is likely to be in contactless or NFC payments, however outside Japan and Korea it has not taken off yet. Even in NFC there is likely to be a battle between operators, handset manufacturers and credit card companies for control of the channel.

So in the meantime brands are using their own payment methods. The iPhone appstore demonstrated how registered users could quickly make a payment against an existing credit card, which has extended into retail with the likes of Amazon’s one click payment system. Various providers have played with their own mobile payment systems, but few of them had the reach for it to take off. The move by Starbucks is significant though: 20% of their US transactions are made on the card. Given the large number of outlets from Starbucks their mobile payment system has a good chance of taking off.

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