Pitchrate | The Starbucks Mobile Payment Product

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David Schropfer

David W. Schropfer is the Author of the new book, “The Smartphone Wallet- Understanding the Disruption Ahead,” which is the first book on this topic written for consumers. The book explains that the multi-trillion dollar worldwide payments industry is being challenged, and huge companies have a...

Category of Expertise:

Business & Finance, Personal Finance


Author: The SmartPhone Wallet & Partner @ TLG

User Type:



02/22/2011 12:05pm
The Starbucks Mobile Payment Product

My wallet will forever stay in my pocket at Starbucks. That doesn’t mean I’m going to stop buying Starbucks coffee; it means that I can finally feed my caffeine addiction using only my SmartPhone.

When Starbucks Coffee announced yesterday that over 6,800 of its locations would accept mobile payments, there was a significant amount of buzz in the press. This morning, I used this service for the first time.

My first unfortunate impression was that the philosophy behind Starbucks mobile payment was reminiscent of the philosophy of the National Rifle Association (NRA). This requires some explanation, obviously, so here it is:

The NRA believes that any small step toward gun control will turn into a stampede of restrictions that will end our ability to own the weapons. That is why they chase any attempt at new restrictions, regardless of the relevance. Starbucks seems to be chasing any new variation of mobile payments, regardless of its relevance. But, what may seem irrelevant today could be the basis for something highly relevant tomorrow.

After using the Starbucks mobile payment product today, it seems that Starbucks is just trying to take the first step into mobile payments; they seem to believe that any small step toward mobile payments will turn into a stampede of transactions. And, they may be right.


The Starbucks mobile payment product is, at best, a small step toward mobile payments. At first, I was hoping that the process would require zero plastic cards. However, the process actually requires two different cards.

First, if you want to pay for your Starbucks coffee using your BlackBerry or iPhone, you need to download the application. Next, you need to buy an actual (not virtual) prepaid Starbucks card, which is the first piece of plastic needed in this process. You can purchase the Starbucks prepaid card in any Starbucks location or online. If you buy it online, you can only use Visa, MasterCard, American Express, or Discover - which is the second piece of plastic required in this process. If you buy the plastic Starbucks prepaid card at your local Starbucks, you can also use cash and therefore only use one piece of plastic during the process.

After the purchase of your plastic Starbucks prepaid card is complete, you need to complete the set-up by opening the app on your SmartPhone and answering the 16–digit Starbucks prepaid card number plus the eight–digit security code. Unfortunately, at this point, none of those 24 digits will be saved in your SmartPhone. If you want all of this information to be available to you without reentering, then you have to register Your Starbucks prepaid card to your “Starbucks account” through the Starbucks SmartPhone app (or online).

Don’t have a Starbucks account? Sorry, you need to create one. Just like any other account on any other website, you need to establish a new username and password. Starbucks also requires that you to enter your first name, last name, address, and you have the option of entering your birthday (so you don’t miss your annual birthday gift of a free cup of coffee). If you are like me, you need to remember another username and password about as much as you need another hole in your head, but it really is necessary if you want to use Starbucks mobile payments.

Of course, you can choose not to create a Starbucks account, but that means you will need to carry the plastic Starbucks prepaid card with you, and enter the 16–digit account number and the 8–digit security code into your SmartPhone every time you want to pay with your SmartPhone at Starbucks, which would not only defeat the purpose of paying with your SmartPhone but also significantly irritate the people standing in line behind you.


Although the Starbucks mobile payment product is a “small step,” it clearly is a step in the right direction. When the cashier at my local Starbucks rang up my transaction, I opened the Starbucks app on my iPhone, and pressed, “touch to p


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