Is Starbucks Getting a First Mover Advantage with Mobile Payments?
Starbucks (NASDAQ:SBUX) announced today that the company will offer a mobile-payment application that will work with Google (NASDAQ:GOOG) android phones. The move is a first step towards fully implementing a mobile-payment program through the Google Wallet service, which is currently in beta-testing. Starbucks made the decision to begin development of the Android App following the commercial success of an earlier, more limited application it released for Apple (NASDAQ:AAPL) iPhones. The iPhone App hit markets in January and was well received by consumers, leading to over three million mobile transactions in the months following its release.
The mobile app allows users to access digital Starbucks cards, where they can update account balances, view transactions, and earn points towards rewards programs. Starbucks expects to expand its mobile payment option to some 9,000 retail locations, and an additional 1,000 locations in Safeway (NYSE:SWY) grocery stores, by year end.
Last month Starbucks (NASDAQ:SBUX) Exec K.C. MacLaren, Director of Mobile and Emerging Platforms, spoke on the company’s ambitions for its mobile-payment program, emphasizing that the initiative would be directed more towards enhancing customer loyalty than increasing sales revenues.
Starbucks could be a game changer for Google if the company signs on as a full participant in the Google Wallet program, which already features retailers Macy’s (NYSE:M), American Eagle (NYSE:AEO), fast-food chain Subway, pharmaceutical retailer Walgreens (NYSE:WAG), and 20 other brand name stores.