Showing posts with label starbucks. Show all posts
Showing posts with label starbucks. Show all posts

Tuesday, December 6, 2011

One in Four Starbucks Transactions Now Use Mobile Payments

In 2011, $2.4 billion was loaded onto Starbucks cards overall.Less than a year after Starbucks launched an app that allows mobile payments, it has hosted 26 million such transactions on iOS, BlackBerry and Android. Roughly one in four Starbucks card transactions is now executed using contactless  mobile payment.


In the nine weeks after it was released, there were three million transactions. But in the past nine weeks, there have been six million, says Adam Brotman, SVP and general manager of Starbucks. One in Four Starbucks Transactions Now Done Via Mobile:


But mobile vastly lags the Starbucks card where it comes to volume. About  $110 million has been reloaded to customers’ Starbucks cards using mobile top up, Brotman says. Some $2.4 billion was loaded onto Starbucks cards overall in 2011.


So 25 percent use mobile payment, but only about 4.5 percent of card top-ups have been conducted on the mobile device. For whatever reason, it appears people are more comfortable using PCs to refresh their accounts, instead of reloading directly on the mobile. 


For those of you who have done both, there might be a simple reason. It is just easier to reload on a larger screen than on a smart phone. 

Thursday, December 1, 2011

MasterCard invests in mFoundry

MasterCard has made an investment in mFoundry, the developer of mobile banking, payment and commerce solutions that created the Starbucks mobile payment system. MasterCard also seems to be interested in mFoundry's relationships with hundreds of banking institutions that have created their own branded apps. 


Intel Capital, Fidelity Information Services and Motorola Mobility also are said to be part of the funding round for mFoundry. Previous investors include PayPal and NCR. The list of backers illustrates some of the dimensions of the developing mobile commerce ecosystem, which includes mobile handset, payment clearing network, retailer terminal, mobile wallet and mobile advertising and marketing functions as well.


For the past five years mFoundry has been developing mobile banking applications for banks that typically enable users to check their balances and conduct other financial services from their phone.



Going forward, MasterCard wants to work with mFoundry to enable those applications to make payments at the register using MasterCard’s near-field communication (NFC) technology called "PayPass." MasterCard invests in mFoundry



Tuesday, November 8, 2011

Starbucks Canada Gets Mobile Payments

The official iPhone application from Starbucks now is available for Starbucks customers in Canada. In the U.S. market, Starbucks has gotten about 20 million transactions in less than a year.


Most contenders in the mobile payments or mobile wallet business are hoping to create large-scale platforms used by lots of retailers. Starbucks. on the other hand, has reasons of its own for creating a proprietary system that already has processed more than 20 million mobile payment transactions.


The approach shows one way even "targeted" mobile payment applications and systems can add business value. For starters, the Starbucks approach does not require inventing anything new. It uses existing tools to quickly reach critical mass.



mobile payments forecast


Starbucks also has clear business drivers, mostly related to enhancing loyalty.


Since each mobile payment account is tied to a Starbucks card, Starbucks increases the value and usage of its prepaid cards.


Sunday, November 6, 2011

Starbucks has Processed 20 Million Mobile Payments

Most contenders in the mobile payments or mobile wallet business are hoping to create large-scale platforms used by lots of retailers. Starbucks. on the other hand, has reasons of its own for creating a proprietary system that already has processed more than 20 million mobile payment transactions. 


The approach shows one way even "targeted" mobile payment applications and systems can add business value. For starters, the Starbucks approach does not require inventing anything new. It uses existing tools to quickly reach critical mass.


mobile payments forecast

Starbucks also has clear business drivers, mostly related to enhancing loyalty. 


Since each mobile payment account is tied to a Starbucks card, Starbucks increases the value and usage of its prepaid cards. 


That also means Starbucks benefits from the float on payment instruments that are pre-funded. Starbucks gets paid before products are delivered. There also is some amount of "breakage" as well, the small amounts that might be left on pre-paid cards, and never used.


Starbucks Mobile Pay, the company’s pay-by-mobile application and in-store scanner system, was rolled out nationwide in January 2011. The system, available at roughly 9,000 locations, lets iPhone, Android and BlackBerry users with the Starbucks or Starbucks Card Mobile applications pay with their phones by scanning 2D barcodes on the screen at store registers. Starbucks has processed 20 million mobile payments

Wednesday, May 4, 2011

Isis Shifts Strategy: What Happens Next?

If there is any single issue that will drive any retailer away from a retail payments system it is higher cost per transaction. Forcing a retailer to spend $200 or so per payment terminal also is a huge barrier to adoption. Blocking a merchant’s ability to use a form of payment such as a branded credit card also is a disincentive, particularly since the merchant’s own branded vehicles potentially can provide more information about the customer, and the customer’s preferences, than any third party form of payment.

It appears Isis has stumbled with retailers because its proposed payment system provides all three barriers, says Richard Crone, Crone Consulting principal and payments consultant.

And Crone agrees that, as tough as it would have been to overcome those obstacles, any other revenue model Isis now might adopt could fight Isis facing both well-funded giants such as Google, Apple, PayPal and Amazon, or any number of startups, sufficiently well funded to pose a significant challenge to “near field communications” as the communication method for any number of payment-related systems and applications.

In fact, Crone believes a number of carrier-independent approaches from well-funded start-ups not requiring NFC “could make NFC obsolete.”

“Maybe you don’t need the NFC approach,” says Crone. “There are 16 different ways the communications function can be handled.”

Starbucks, for example, represents the “most successful new payment method, ever,” Crone says. Starbucks reached one million mobile payments  processed in 30 days. “Nobody else ever has received those kind of numbers in that short a period of time.” And all Starbucks did was build on the existing prepaid Starbucks card and 2D barcodes. Starbucks has signed up more than three million of their customers for the program, and they likely include some of the best customers Starbucks has.

Customer contact  is the real advantage, he argues. When a merchant accepts payment from a standard credit or debit card, the data the merchant can capture is slim. The Starbucks approach provides a clear contrast.

When a customer registers for the Starbucks mobile payment service, the customer states their preferences and supplies contact information. As a result, Starbucks can communicate with their customers, before and after any transaction.

Starbucks also enjoys lower transaction costs, as it is prepaid system where customers load credits into their accounts ahead of time.

It might not be incorrect, in essence, to argue that, if merchants were starting today with a payment technology system, they wouldn’t even buy point of sale terminals. They’d simply leverage the technology the customers pay for, including using the customer’s communication services, and process directly from a smart phone, Crone says.

Retailers need a payment strategy, and a a mobile strategy, that provides incentives for customers to use the forms of payment that build loyalty, make customers contactable and provide lower costs. That doesn’t mean abandoning a “portfolio” approach. After all, people still will want the freedom to pay using cash, credit card, debit card, check or gift card. But among those options, retailers benefit when they can use the payment system to build loyalty, knowledge of their customer preferences and gain the ability to add marketing services on top. When possible, transaction costs might also be lower taking that approach.

That doesn’t mean NFC won’t find applications, or that Isis cannot ensure itself some role in the mobile payments business. NFC requires a secure element that carriers want embedded in the subscriber information module. Carriers control the SIM, so they would still be gatekeepers when NFC is used.

“So even if they open up to card associations, they control the loading of credentials,” says Crone. But various players in the ecosystem will contest the location of that loadable data, arguing that it should not be in the SIM, but elsewhere in the device. Device manufacturers, for example, would prefer that approach, as it makes their devices more valuable.

With Isis apparently withdrawing from an effort to compete directly with Visa and MasterCard, it will obviously have to find some other role. But competitors who do not necessarily want to be limited by using NFC, the SIM or getting the carrier’s permission now will have new incentives to push their rival systems in the marketplace.

In a way, Isis had been casting a bit of a shadow over rival approaches. Now, it appears we are headed for a period of wider experimentation, with many participants looking at ways to create payment systems providing higher marketing value, advertising or promotion platforms or customer niches, such as mobile merchants, smaller merchants or merchants primarily seeking loyalty program advantages.

Nor is it entirely clear that the “best” strategy is the “most ubiquitous, most widely used” approach. Large retailers might well conclude that they are best served by their own branded programs, using forms of payment limited to their own establishments and venues. They still will accept all the other popular forms of payment, so they give up nothing to gain the advantages of approaches such as that taken by Starbucks, which is to create a program usable only at Starbucks.

With the shade apparently removed, lots of smaller plants will get sunlight.

Sunday, February 6, 2011

Starbucks Mobile Payment Demonstration



The Starbucks mobile payment system might accurately be described as consumer experience and loyalty program, more than a technology breakthrough. It uses a minimum of new in-store or consumer technology and an initially-simple way of replacing a credit card swipe with a bar code reading.

 The 2D barcode in the Starbucks Mobile Card app, which is no longer a QR code in the latest version, currently appears to encode only the card account number, effectively acting as a replacement for the magnetic stripe, notes FaceCash CEO Aaron Greenspan.

"Right now from the POS viewpoint only encoding the account number works well because it doesn't require any additional POS customization," says Greenspan. The advantage is speed: the transaction is fast because it's treated effectively the same as a card swipe, which is already pretty fast.

Saturday, February 5, 2011

Starbucks Mobile Payment System Didn't Use NFC for a Reason

Technology decisions ought to be dictated by business requirements, and so should the timing of technology investments. Generally speaking, if a business can wait for the "next generation" of technology, it often should do so. If it cannot wait, and has an immediate business need, it should buy the existing solutions, especially if there is an upgrade path.

The Starbucks mobile-payment app, now available for iPhones, the iPod Touch and several BlackBerry models, is based on the coffee chain’s popular prepaid Starbucks Card, and is an example of that sort of process. You might wonder why Starbucks would deploy a 2D bar code solution now, when it could wait 18 months to two years and possibly use a new system based on one or more near field communications platforms.

The answer is that Starbucks did not think it could afford to wait. Nor, in one respect, is the Starbucks mobile payment system primarily about "payment." It is about loyalty, especially the Starbucks card.

Customers use the private-label card for one in five transactions at Starbucks coffee shops and last year loaded $1.5 billion in their card accounts, up more than 20 percent from 2009, said the company. Since the mobile payment app is linked to the Starbucks card, and since the Starbucks card itself if more about loyalty than "payment" as such, Starbucks is betting that the chance to extend its loyalty program to the mobile handset is worth doing right away.

Not unimportant is the fact that 2D bar codes can be used by a wide range of handsets, while near field communications is only now starting to be introduced. In a scale business, the advantage of large installed base is obvious. So is the fact that the terminal upgrades at roughly 8,000 locations are modest.

With the app, after the customer scans the 2-D bar code at the point of sale, Starbucks deducts the amount of the purchase from his Starbucks Card account over the network.

The physical implementation might not be the most elegant imaginable (one has to have a physical Starbucks card first, and you have to obtain one physically, at a store), but that was not apparently the most-important consideration. Speed to market, low cost and ubiquity seem to have been the overriding considerations.

Saturday, January 22, 2011

Starbucks Mobile Payment System is Really About Loyalty

About 20 percent of Starbucks transactions are made using a Starbucks Card, which provides users with a rewards program. Mobile payment "will extend the way our customers experience and use their Starbucks Card," says Brady Brewer, Starbucks Card and Brand Loyalty VP.

Starbucks said customers loaded $1.5 billion onto Starbucks Cards in 2010, a 21 percent jump over 2009.

In a real sense, the Starbucks mobile payment system is more about loyalty than "payments."

Wednesday, January 19, 2011

Starbucks Rolls Out Mobile Payments at 7500 Locations

Starbucks is launching its mobile payment system nationwide, to 6,800 of owned stores, plus more than 1,000 outlets inside Target stores. The Starbucks mobile payment system will work initially on iPhones, BlackBerries and iPod "Touch" devices, with an Android version in the works.

To use the system, Starbucks cardholders load an application onto their iPhone or BlackBerry smartphones. The application displays a barcode that's scanned at the register to pay for drinks. Users can also manage Starbucks accounts and find nearby stores with the application.

One in five Starbucks transactions is now made with the store cards, and mobile payments "will extend the way our customers experience and use their Starbucks Card," says Brady Brewer, vice president of card and brand loyalty. 

Customers apparently like using Starbucks Cards. They loaded more than $1.5 billion onto the cards last year, up 21 percent over 2009.

Starbucks said more than a third of its U.S. customers use the devices, and nearly three fourths of the smartphone-toting Starbucks customers have either an iPhone or a BlackBerry.

Wednesday, June 30, 2010

Looks Like Your Starbucks Purchases are a Coincident Economic Indicator

Your spending at Starbucks and Dunkin' Donuts looks like a coincident economic indicator, meaning coffee purchases at the two outlets track the economy.

The Christmas season spike, when people are buying gifts, rather than coffee, appears to be the only anamoly.

Too bad Starbucks is not a leading indicator.

Monday, June 14, 2010

Starbucks Digital Network Launches

Starting July 1, 2010, Starbucks is enabling free Wi-Fi at its U.S. company operated stores, and launching the Starbucks Digital Network, which will offer unique content, including unrestricted access to paid sites such as the the Wall Street Journal, as well as content from iTunes, The New York Times, Patch, USA TODAY, The Wall Street Journal, Yahoo! and Zagat.
    
Set to debut in the fall, and offered at U.S. company-operated Starbucks stores, Starbucks Digital Network will allow customers free unrestricted access to various paid sites and services including previews, free downloads, local community news and activities.

Developed in partnership with Yahoo! and using AT&T access, the new network aims to create a unique customer experience that also deepens customer engagement.  The new plan further illustrates the public Wi-Fi business model, which frequently "gives away" the access as an inducement to support some other business model.

"Tokens" are the New "FLOPS," "MIPS" or "Gbps"

Modern computing has some virtually-universal reference metrics. For Gemini 1.5 and other large language models, tokens are a basic measure...