A number of years ago the popular TV show American Idol taught many Americans how to text on their mobile phones. Starbucks is now in the same position regarding mobile payments. The company can educate and mainstream mobile payments in a way that few other companies are in a postion to do.
Starbucks announced this morning that it is now expanding its current pilot mobile payments program to 300 stores in and around New York City:
The expansion of mobile payment into New York City builds on the successful test program currently in 16 stores in Seattle and Northern California and at more than 1000 Starbucks in U.S. Target stores. The overall Starbucks Card program is experiencing impressive growth and performance, and currently almost one in five of all in-store transactions are paid for with a Starbucks Card, an activity made even more convenient with the introduction of Starbucks Card Mobile App. Customers are on track to load more than $1 billion on Starbucks Cards this year, and at the end of the third quarter, sales of cards were up 17 percent over last year and the reload on existing cards was up more than 59 percent compared to last year.
Users associate credit card accounts with the app, which is scanned at the register. Use of the app essentially speeds payment at the register and avoids the need to fumble with cash or take out a credit/debit card with people waiting in line. This is what mobile payments represent -- a faster and (maybe) more secure surrogate for a credit or debit card. No mystery.
The convenience and ease of use of the system, which I haven't directly experienced at this point, should help pave the way for acceptance of similar mobile payment programs from other vendors and retailers. Three to five years from now mobile payments will be much more mainstream -- and we may have Starbucks to thank for it.