Receive the latest articles for free. Click here to get the Mobile Commerce Daily newsletters.

Starbucks, McDonald’s leading the way in mobile contactless payments

January 26, 2011

The Starbucks Card Mobile app enables mobile payments at the POS

With corporate behemoths such as Starbucks Coffee Co. and McDonald’s Corp. leading the way, 50 percent of consumers will have made a mobile payment of some kind by 2014, according to Juniper Research.

Starbucks mobilized its own loyalty program by launching a mobile payment-enabled application for multiple smartphone platforms that can be used across the United States. McDonald’s has contactless payments infrastructure already installed in most of its point-of-sale systems worldwide, and it is starting to offer mobile contactless payments as near field communication-enabled handsets are released commercially.

“Many people across the industry have been excited about the prospects for mobile and contactless payments for some time now – myself included,” said Howard Wilcox, senior analyst at Juniper Research, Reading, England, in a blog post. “The step to mass adoption of new technology, though, requires more than this.

“To catch the public’s imagination, awareness and indeed to garner enough interest for widespread use, it has a lot of impact when well known merchants and locations that people see in the high street or mall and buy from every day start to offer and promote new ways of paying,” he said.

“This is what has happened in the last few days.”

Starbucks ramps up mobile commerce initiatives
Starbucks is letting customers pay for in-store purchases via their smartphones as part of a national program that is now available in 6,800 company-operated stores.

The Starbucks Card Mobile application is now available at its 6,800 U.S. company-operated Starbucks, and all U.S. Target stores.

The Starbucks Card Mobile application, powered by mFoundry, lets BlackBerry and iPhone users pay for their purchases faster using their handsets.

The company, which first tested mobile payments last year in several of its locations, claims that the program is the largest of its kind in the U.S.

“Extensive rollout here,” Mr. Wilcox said. “Just scan your phone and go with your coffee – it is promoted as the fastest way to pay.

“Excellent move and my guess is that in the future, assuming it goes well, we will see apps for other smartphones to add to BlackBerry and iPhone,” he said.

McDonald’s is no mobile slouch
McDonald’s is working with Visa in the mobile space. The fast-food giant announced that contactless card payments will be offered in all of its 1,200 restaurants in Britain by this summer.

“Oh, and, wait for it – the company is emphasizing speed – McDonalds prefaces ‘contactless’ by labelling it ‘lightning fast,’” Mr. Wicox said.

A McDonald’s spokesperson said in a statement that “Contactless payment saves time and effort, allowing customers to quickly pay for items which cost $20 or under without having to search around for cash.”

While customer convenience is one of the key benefits, there are more benefits too—reduced queues or lines, for example, per Juniper Research.

“How many times have we walked up to a fast food or drink outlet, seen eight people waiting, and moved on?” Mr. Wilcox said. “So moves like this reduce customer loss and increase customer throughput.”

Mobile contactless payments also mean less cash is handled by the merchants – with the attendant risks of errors in counting, theft, mistakes in giving change and slower transaction speeds, per Juniper.

“Yes folks, this is why we’re forecasting a big future for mobile payments with nearly one in two of us having made a mobile payment of one sort or another by 2014,” Mr. Wilcox said.

“With iconic fast food and drink brands like Starbucks and McDonald’s leading the way, we’re sure to see more launches in the future,” he said. “After all, 2011 has only just begun…”

Share on FacebookShare on LinkedInShare on Twitter

Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

Like this article? Sign up for a free subscription to Mobile Commerce Daily's must-read newsletters. Click here!

Tags: , , , , , , , , , , , , , , , , ,

You can leave a response, or trackback from your own site.

Leave a Reply