In its first major play to connect its mobile-payments service with social media, Starbucks Coffee Co. on June 30 unveiled a mobile-payment application it developed in-house that consolidates the features of previous apps with links to enable users to send Starbucks gift cards via Facebook.
The new Starbucks for iPhone app also includes a link to Twitter, although there is no direct link from that social-media channel to Starbucks’ electronic gift cards.
Available so far only for Apple Inc.’s iPhone and iPod Touch devices, observers believe Starbucks eventually will make the application available for Android smartphones, as it did recently with its core mobile-payments app that enables customers to pay from funds stored in a prepaid account (
The new application combines the features of Starbucks’ general mobile application that provides broad company and store information with Starbucks Card Mobile, the application it introduced in 2009 that enables customers to pay by displaying a two-dimensional bar code on their mobile handsets to a reader at the point of sale.
Also included is a feature that enables customers to use their mobile handsets to send an electronic gift card via email or Facebook for any amount between $5 and $100. Starbucks’ eGifts feature, introduced in January, previously was available only through the company’s website.
So far, Starbucks customers reloading their prepaid accounts using mobile handsets are limited to credit cards, signature debit cards and PayPal, although they can reload accounts at the point of sale using any payment method.
The company has not indicated whether it will enable PIN-debit cards or automated clearinghouse funds transfers for reloading accounts via the Internet or mobile devices, but some observers say that would be an advantage for Starbucks and for users.
“If people could reload their accounts using mobile phones through the ACH, that would be a real plus because it would increase the options for customers and cut the interchange Starbucks has to pay for credit cards,” Brian Riley, a TowerGroup senior research director, tells PaymentsSource in an interview.
Riley sees no downside to the fact that Starbucks has created a closed-loop mobile-payment system that includes its stores plus its locations inside Target Corp. and Safeway stores.
“There’s no reason Starbucks can’t develop a parallel closed-loop system while open-loop mobile-payments evolve,” Riley says, noting a growing number of mobile-payments schemes are shaping up to be open-loop platforms harnessing Near Field Communication technology (
The most significant thing about Starbucks’ new mobile app is the ease with which younger, upscale, tech-savvy consumers can use social media tools such as Facebook to send electronic gift cards, Megan Bramlette, a director at Auriemma Consulting Group, tells PaymentsSource.
“People are getting increasingly comfortable with using Facebook for their primary communications with friends and family, and Starbucks’ integration of electronic gift cards directly into the app alongside everyone’s contacts and Facebook friends is a smart move,” she says.
Starbucks developed the new app in response to customer requests to consolidate various features into a single app, Adam Brotman, Starbucks vice president and general manager, digital ventures, said in a press release.
“Finding new ways to connect with our customers and elevate the experience in and out of our stores drives our continued growth in the mobile space,” Brotman said.
Starbucks has said that with the addition of the Android app for mobile payments, some 90% of its customers with smartphones will be able to make mobile payments.
MFoundry Inc. previously was Starbucks’ partner in its mobile-payments app development.
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