starbucks mobile payments
Cards & Payments

Why is Starbucks leading our adoption of mobile payments?

Photo by Brigitte Tohm

So why does the Starbucks rewards app top the charts for the most used mobile payment apps in the U.S. in 2018*:

  • Starbucks app: 23.4 million users
  • Apple Pay:         22.0 million users
  • Google Pay:       11.1 million users
  • Samsung Pay:    9.9 million users

*in-store payments (Source: eMarketer)

Admittedly, we are still just scratching the surface where it comes to payments using a mobile device.  The same could also be said about commerce over the internet, where most consumer internet traffic relates to video.  By adding up all the online video watched on websites, YouTube, Netflix and webcams and you have 77% of the world’s internet traffic, according to US tech firm Cisco.

To really drive the uptake of mobile payments, a different approach to changing our behaviour needs to be adopted.  What can be done on a mobile phone is a fraction of what can be achieved with a desktop, laptop or tablet.  Without a clear set of consumer benefits, each targeting against a contactless payment alternative, mass adoption will take time or even worse may never occur at all.  There needs to be far greater understanding as to why a customer would be willing to exchange their existing purchasing habits for a mobile first experience.

[dropshadowbox align=”center” effect=”lifted-both” width=”80%” height=”” background_color=”#ffffff” border_width=”1″ border_color=”#dddddd” ]By adding up all the online video watched on websites, YouTube, Netflix and webcams and you have 77% of the world’s internet traffic, according to US tech firm Cisco.[/dropshadowbox]

Mobile Payments Adoption on the Horizon

Borne out by the statistics; the F&B sector is further advanced than the technology & payment companies in this understanding of customer behaviour.  Across the F&B sector, mobile enabled functionality such as ordering, payment & promotion is hugely valuable in an industry where profitability is directly related to the numbers of customers an operator is able to serve.  Mobile allows F&B operators to create compelling customer value whilst inside their restaurants; both time saving & money saving delivered within a fun & engaging mobile experience.

Starbucks Rewards mobile payments app already offers customers those major features of ordering, payment & gamification.  Now McDonalds have started their own strategy to drive mobile adoption, pushing free deals and advertising to promote the use of their mobile app.  Like Starbucks, McDonalds are investing heavily in mobile to encourage habit formation, engender customer loyalty & most importantly drive repeat purchase.  Other global operators will inevitably follow on once they too have the correct technology stack in place to deliver to their customers a combined mobile first ordering, payment & promotional experience.

It is still very much early days to determine those winners & losers in the adoption of mobile payments.  From the statistics, what is clear, a combined approach to ordering, payment & promotion has had the greatest success with customers.

Nick Chambers is Director at Mobile Loyalty Technologies Limited.

Read “What Tim Hortons Can Learn from Starbucks about Customer Loyalty” to keep up to date with the latest buzz surrounding these two coffee chains!

Why is Starbucks leading our adoption of mobile payments?
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