Starbucks Takes Its Mobile Payments App To New York

Mobile is taking Manhattan through the latest expansion of Starbucks Corp.’s payment trial.

Customers now may use Starbucks’ mobile-payment system, already being tested at more than 1,000 stores nationwide, at nearly 300 corporate-owned locations in New York City and on Long Island, the Seattle-based coffee company announced Oct. 25.

As in its other stores that accept mobile payments, Starbucks’ New York locations will enable customers to pay from the balance of a Starbucks prepaid card linked to an application on an Apple Inc. iPhone or a Research In Motion Ltd. BlackBerry device. A special reader at the point of sale scans a bar code displayed on the phone’s screen.

Consumers also may use the app to reload the card, which Starbucks says saves time at the register, where users of the plastic card frequently reload value. The app can show the balance of the linked account, and consumers may use it to access the retailer’s rewards system.

Starbucks launched its payment trial in September 2009 in 16 stores on the West Coast, then expanded it to about 1,000 locations within Target Corp. stores in April after Starbucks’ mobile-software provider, mFoundry Inc. of Larkspur, Calif., tweaked the software to work with Target’s scanners (see story). 

Starbucks says it has had success bucking industry trends with its mobile-payment trial. Whereas many mobile-payment companies are focused on putting Near Field Communication chips in phones, Starbucks has sped up its deployment by using bar codes, which require no changes to phone hardware. And though many merchants today are looking at Google Inc.’s Android phones to expand mobile applications originally launched on the iPhone, Starbucks launched a system on BlackBerry instead last month, realizing that office workers with company-issued BlackBerry handsets already favored its system.

Between iPhone and BlackBerry phone users, the Starbucks app can reach 71% of its smart phone-using customers, the coffee company says.

“With the expansion of mobile payment to New York City, we expect to see more and more customers trading their plastic Starbucks cards for the digital version on their mobile phone,” Brady Brewer, Starbucks’ vice president of card and loyalty, said in a press release.

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