Friday, October 31, 2014

Starbucks Claims 90% Share of Mobile Payments Market

With the caveat that the mobile payments market is very early in its development, Starbucks now is touting its early success.

“In 2013, payment for purchases by use of all mobile devices in the U.S. totaled $1.3 billion,” says Howard Schultz, Starbucks CEO. “Over 90 percent of those purchases taking place in a Starbucks store.”

“That means we had 90 percent share of (U.S.) mobile payments in 2013,” said Schultz, who noted that “close to seven million transactions” now happen each week, 16 percent of all transactions conducted in U.S. Starbucks stores, on a mobile device.

“No company and no retail store, domestically or internationally, even comes close,” he said.  

Of course, observers might rightly notice that the mobile payments business is nascent, with most of the growth yet to come.

But Schultz suggested “Starbucks Coffee Company has cracked the code at tying mobile payment to loyalty.” So the issue is whether Starbucks might now see a way forward to a bigger, more generic role in mobile payments.

“Starbucks is the only local, national or global business of any kind to succeed in crossing both the most difficult and the most critical chasm standing between success and failure in mobile payment, transforming consumer behavior,” Schultz said.

Whether Starbucks should do so, and whether it want to do so on a wider basis is the issue.

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