Can Starbucks Card Mobile Make Mobile Payments Mainstream?
The advent of the internet narrowed the distance between the delivery of a market message and the point of transaction. Now, mobile devices are making that distance virtually nonexistent by unchaining consumers from their computers and transforming phones into wallets.
According to Javlin Strategy & Research, the US consumer market is ripe for person-to-person mobile tools. Up until now, US consumers have been slow adopters when it comes to the use of mobile phones as transactional tools. A new app from Starbucks will be a step towards changing that. Tech blogs are abuzz with recent news that Starbucks has released not one, but two new apps. The first, myStarbucks, allows users to find and contact stores, make drinks, and scan nutritional information. The second app, Starbucks Card Mobile, is the real game-changer. The app, on trial in select stores in Silicon Valley and Seattle, produces a virtual Starbucks card with a scanable barcode, allowing customers to literally pay for their drinks from their phones.
The Starbucks app may turn out to be the first widely-adopted "mass market" app in the U.S. to transform the phone into a purchasing device. Americans are just beginning to use phones as transactional devices, and according to Wired Magazine, the main mobile payment practices available thus far have been:
- Banking apps allowing users to check balances, pay bills, and transfer funds available through online banking programs
- Facebook mobile payments, enabling users to buy Facebook credits by billing their mobile accounts
- MasterCard MoneySend letting users transfer money by linking accounts to mobile numbers
- A small but growing number of special-purpose smartphone apps, similar to Starbucks Card Mobile, allowing users to order and pay for services.
Meanwhile, transactions-by-phone have had significantly greater traction in other markets. For instance, Nokia recently announced Nokia Money, offering a suite of mobile financial services which give all consumers (even those without bank accounts), access to money, inter-person money transfers, the ability to pay utility bills, purchase goods and services, and recharge prepaid SIM cards. In the UK, Birmingham City Council offers a Pay by Phone parking service, which has more than 80,000 registered users. The service allows customers to pay for parking in real time by calling or texting, rather than running back and forth from parking meters with change. In Japan, near-field technology allowing people to pay by waving their cell phones over sensor devices (similar to the expresspay chip technology already available some credit cards), is already taking hold.
