Magazine article American Banker

For Mobile Pay, Starbucks App Is Unusual Call

Magazine article American Banker

For Mobile Pay, Starbucks App Is Unusual Call

Article excerpt

Byline: Daniel Wolfe

Starbucks Corp. is bucking conventional wisdom by introducing a mobile payment app for BlackBerry smartphones.

Experts say that Android is the hottest smartphone for mobile banking, but when it comes to payments, the Seattle coffee retailer, which released its newest app Wednesday, hopes there is still a big opportunity in the increasingly neglected BlackBerry.

Starbucks was an early player in mobile payments, and has repeatedly made counterintuitive moves. By developing an app for Research In Motion Ltd.'s devices at a time when most banks are focused on Apple Inc.'s iPhone or phones that use Google Inc.'s Android operating system, Starbucks appears to be acknowledging that people who might want to use their phones for purchases often carry company-issued BlackBerrys.

"When you look at the Starbucks customer base ... it was pretty clear to me that I had to go to BlackBerry," said Chuck Davidson, the category manager for innovation on the Starbucks card team.

Between the new Blackberry app and its existing iPhone app, Starbucks now has a mobile payment system that can be used by 70% of the smartphone users in its customer base, Davidson said. (He would not break down the numbers further to say how many use each platform.)

In cities, office workers swarm Starbucks stores between 8 and 10 a.m., then again at 2 p.m. for their afternoon break. Especially during this later period, they may not want to drag along the purses or briefcases where they keep their wallets but might bring BlackBerrys to stay connected, he said.

Much of the adoption of the iPhone app came from these office workers, who have showed off its capabilities either on coffee breaks or back at the office, Davidson said, and this led to a faster adoption among office workers than Starbucks originally anticipated.

Since Starbucks introduced its iPhone app last September, users have been requesting a similar app for BlackBerry, Davidson said. Feedback could guide its next move as well. "If our customers tell us to develop Android, we'll develop Android," he said.

George Tubin, a senior research director at TowerGroup, said BlackBerry is "losing market share because things like Android are taking over and showing tremendous growth, but if you look at pure numbers, BlackBerry is still the leader."

Second-quarter data from Nielsen Co. published last month shows that, though iPhone and Android phones each have a growing share of the smartphone market, BlackBerry is tops, used by 35% of smartphone owners. The iPhone has a 28% share, and Android 13%. …

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