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Starbucks: ‘Our Customers Have Fully Embraced Our Mobile Apps’

Philip RyanbyPhilip Ryan
November 1, 2013
in Payments
Reading Time: 2 mins read
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strabux_mobile_earningsStarbucks, the undisputed heavyweight champion of in-store mobile payments, took a bit of time to gloat this week, and who could blame them?

In the coffee giant’s earnings call Wednesday, CEO Howard Schultz laid out just how big mobile payments are in Starbucks’s world:

Today with 11% of our U.S. and Canada in-store transitions being paid for with a mobile device, Starbucks is far away the clear leader in mobile payment. We are encouraged by how our customers have fully embraced our mobile apps as the most convenient way to pay, reload and keep track of their loyalty rewards. With the current average of over 4 million mobile transactions per week and more than 8 million customers using our mobile app, Starbucks mobile platforms are fast growing customer touch points. Through them we are communicating with and delivering innovation to our customers in a way that no other retailer can and on the horizon, our enhancement to our mobile apps that include mobile ordering and digital tipping are on its way.

4 million transactions a week is certainly an impressive figure, and even more so considering that the value is pre-l0aded into the app, so Starbucks bags a lot of cash before it even serves the coffee. As gift-card startup Marqeta’s CEO Jason Gardner put it, “35% of their revenue is captured before anyone walks in the door. Other companies say, ‘I want that, but we don’t own our payments infrastructure.’ I came to the realization that Starbucks was a technology company that sold coffee. Starbucks created a relationship with the customer through payments.”

That relationship built through payments is huge, and Schultz says it’s built “in a way no other retailer can.” Mobile ordering is standard fare for PayPal and digital tipping makes sense for a coffeehouse and will capture a great deal of value otherwise left on the cards, and brighten employees’ a bit.

Not mentioned on the call was Square, Starbucks’ payment processor. Schultz announced his departure from Square’s board the day before the earnings call. All Things D reports his departure will not affect the companies’ existing relationship.

Tags: mobile paymentsPayPalSquareStarbucks
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