Magazine article American Banker

Starbucks' Mobile Pay Updates Win over New Audiences

Magazine article American Banker

Starbucks' Mobile Pay Updates Win over New Audiences

Article excerpt

Byline: Daniel Wolfe

The Starbucks mobile app is now used for 8 million transactions a week, or 19% of the company's U.S. sales, but the biggest development is not in the numbers but the nature of the app's users.

The company has accepted mobile payments at the counter since 2009, and its new Mobile Order and Pay feature provides patrons an alternative to the typical process of waiting in line, paying and then waiting again for a barista to call out their names. To the deaf and the extremely busy, this new process of ordering ahead from the app was especially meaningful.

Deaf customers "are now able to easily order and receive their customized beverage just the way they want," said Kevin Johnson, Starbucks' president and chief operating officer, during an April 23 conference call to discuss the Seattle company's earnings.

The mobile ordering feature also appeals to students, who can order and pick up a beverage as they rush between classes, as well as parents who have little time to stop for coffee as they rush their kids from place to place.

"This is not just leveraging the strong base that we already have in our mobile commerce platform," said Adam Brotman, the company's chief digital officer.

Starbucks' success in payments so far underscores how nonbanks can outdo banks at their own game and should be watched closely by banking industry participants. The coffee chain is currently testing its mobile ordering service in 600 stores in the Pacific Northwest and plans to expand the feature nationwide over the course of the year. …

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