Mobile payments still going strong at Starbucks

Starbucks Mobile Payments App

Starbucks Mobile Payments AppTwo years after its app was first launched, the company still leads in smartphone transactions.

Two years ago, Starbucks launched its smartphone app for mobile payments, and while it got started with a bang, it has continued its successes and maintains its position as the unchallenged leader in transactions made over smartphones.

This success is true from virtually every angle, from volume to frequency of use, and even user experience.

The Starbucks mobile payments app has set the standard to be achieved by any other entrant to the marketplace. That said, its leadership in that space doesn’t appear to be going anywhere in the near future. The company just held its Q1 conference call in order to discuss its earnings during the start of the fiscal year (which includes the holiday shopping season).

The company’s CEO, Howard Schultz, drew attention to the considerable mobile payments success they’ve seen.

He also went on to mention how important the mobile payments app has become to the tremendous coffee chain. As a whole, the gift card makes up for approximately one quarter of the spending in the United States at Starbucks, said Schultz. He pointed out that this was the most popular gift item that the company sold during last year’s holiday shopping season.

During the most recent fiscal quarter, there was over $1 billion loaded onto the company’s gift cards. This represented a 25 percent year over year increase. Moreover, one in every ten American adults received one as a gift during the last holiday season. Of the card transactions during that time, approximately 20 percent were conducted through the mobile payments app.

Shultz stated that “Over 7 million customers now use one of our mobile payment apps, translating into 2.1 million mobile payment transactions each week, with hundreds of thousands of additional Starbucks mobile app downloads each week.”

Beyond mobile payments, the app was also used for loyalty card participation. In 2013 Q1, the company increased its membership by 1.4 million. This represented an increase of 86 percent over the same quarter last year, which saw 778,000 new members, according to Schultz’s data.

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