Starbucks Coffee customers can now pay with cash, credit, Starbucks' mobile payment app, or Square Wallet, after the popular chain today began accepting the mobile payment application at 7,000 locations.
With Square Wallet, customers can pay and then explore other nearby businesses; browse the menu, store hours, and transaction history; and pay for their purchases with their smartphones. The option is an addition to Starbucks' mobile app, available for both Android and Apple devices, which are integrated with the Starbucks Card and My Starbucks Rewards programs, and are used more than 2 million times weekly, according to Starbucks.
To use Square Wallet, customers must download the app to their device and set up an account, which they link to their debit or credit cards. At the register, they tap "pay here," scan their QR code, and the digital receipt instantly appears. Consumers must run iOS 5 or above or Android 2.2 or above in order to use the software.
Expanding into a well established chain like Starbucks gives Square Wallet immediate access to millions of prospective customers. It also gives local small businesses the opportunity to be found by nearby patrons, said William Henderson, director of Square Wallet, in a statement:
Square Wallet gives Starbucks customers a way to discover small businesses in their neighborhood. We're excited to work with Starbucks to introduce a broad new group of people to the benefits of using Square.
Widespread adoption of smartphone payments has yet to take off. Consumer apathy over a new form of payment, security concerns, and a lack of retail partners have been blamed -- but the Starbucks partnership will likely add some spark to the market, spurring interest from consumers and other businesses.
During a stroll through the mall recently, I noticed every kiosk employee seemed to have the Square Register attached to their smartphones, swiping credit and debit cards for every other customer transaction. When I bought a case for my new iPhone 5, the kiosk owner told me how much she liked the Square Register because of its pricing and its ease of use. No doubt, Square Wallet would be equally easy for her to adapt to and use at her busy small business -- but will she, and other retailers, add it before or after customers request it?
Starbucks may be one of the first large chains to pick a digital wallet partner, but it won't be the last. Midsized and enterprise consumer-facing companies should follow usage trends closely to determine which alternate payment systems emerge as shopper favorites. After all, one day cash may no longer be king, and the digital wallet may prevail.
I've been struggling to figure out why consumers would want to use mobile payments. Seems to me that cash and credit cards are already mighty convenient.
This is one case where it makes sense. Starbucks purchases are habitual purchases; consumers buy the same thing every day. Anything that can be done to automate the process will increase customer satisfaction and reduce transaction times.
This is an encouraging news. We consider our phones personal and private, there is no better candidate to be a digital wallet than our phones. Security concerns will eventually fade away, NFC, passbook, and any type of digital wallet technologies can be as secure as we want. Starbucks has a right step in the right direction.
In a way, I think my smartphone is more secure than my credit card. The reason? I would know almost immediately if I lost my iPhone whereas I really wouldn't know if someone stole one of my credit cards or set up a card using my info and a fraudulent address. If someone steals my phone, I have two or three systems installed whereby I can immediately render it useless. I can phone Verizon and have them freeze it. I can use Lookout. Or there's another service on there that will, basically, self-destruct the phone. So I'd almost rather use a phone-based digital wallet than traditional plastic, and hope more retailers offer this capability soon.
Very interesting way of looking at it, Alison. I never thought about the iPhone being more secure because of that but it makes total sense. People will freak if they lose their phone for even a moment, but a credit card is so easy to misplace or lose altogether and I've known people who have gone months without ever knowing a credit card was gone because they use it/them that little. Just comes to show you how much our society is changing and our dependence upon technology is growing, I suppose.
I would like to think that this new way to pay with square really hits off. I use this app on my android phone and I like it but not a lot of places in NC were I live use it. Now on the other hand as a merchant I love how it is easy and a small % charged per transaction. The only thing about this app and Starbucks is that I guess you would need to use the Starbucks Gold card I have which is the rewards card as the payment for the purchase to get my rewards. I am not sure how that is working out sense I have not had the chance to use it at a Starbucks yet. I can easily use the app that Starbucks has on my phone so not sure If I would need to use the Square one but it is great idea. I will say if I forget my phone I will go home for it but I have forgot my wallet and I don't go back for it. So that be nice to be able to use my phone to pay for everything.
I would have to agree if I had someone steal my wallet and take my credit card I may not know for a while till I needed that card but my phone like you said I would know right then. My phone goes with me everywhere and I normally have it in my front pocket or in my hand all the time. While I have lookout on my phone to render it useless via the wipe feature and then I have one that is to make it scream if someone tries to access it without the correct password after three tries. The bad thing is I have T-Mobile so the thief will have my phone by putting their sim card in it but they would have to do a factory reset on it to use it.
Do you carry your license in your wallet? I'd go back for it at least for that :).
Here in the States, we are so behind on some of these advances. Countries like Japan have been using their phones for years to make purchases. Even at vending machines. It's only a matter of time before it finally catches on here and I for one thing its a brilliant idea. We use our phone for everything now, so why not for payments too?
If the thief knows what they are doing, especially with a sim-based phone, it's not too difficult at all. It's a good thing that a lot of newer phones have some pretty good security measures. Like how the iPhone can wipe your data after so many failed attempts. I'm not sure what android phones offer since I don't use one and never have, but I'd imagine there is something similar or maybe an app that could do it.
Cell phones are definitely a more secure payment option than credit cards. Mythbusters did an episode once on just how easy it is to get information off of a credit card. Not as easy to do with a phone that is secured.
We're definitely going to see more digital wallet options, although it has surprised me too, @JAdams, that the U.S. lags other nations in this area. I'm not sure if it's because the credit card and debit card providers are so well-entrenched here or whether there are other reasons, but it's certainly not because people don't have smartphones! With more consumers accustomed to making online payments, using our phones to pay the tab is a natural next-step.
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