Starbucks says 1 in 6 payments already mobile

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Starbucks says mobile payments are taking off in a big way and it’s already handling almost 7 million a week at its U.S. coffee shops.

That accounts for 16 percent of all transactions at its stores and, the company says, meant it transacted 90 percent of all of mobile payments in the entire U.S. in 2013.

The company’s slice of the national mobile payments market is sure to dip in the years ahead as other retailers start catching up to Starbucks, in part thanks to the recent launch of Apple Pay, but Starbucks says it sees no slow down in consumer adoption of its mobile payments technology.

Starbucks has integrated payments into its its own app, which allows customers to keep a prepaid Starbucks card on their phone, enabled with automatic refills when it gets low on cash, and keep a list of favorite drinks to make ordering easier.

Starbucks has apps for both Apple iOS and Android devices. On iOS, the prepaid Starbucks card is integrated with the phone’s Passbook digital wallet app.

“What you’re going to see in the years ahead will be a rapid acceleration in mobile device purchases and a continued significant migration away from bricks-and-mortar commerce,” said Howard Schultz, CEO of Starbucks, in a conference call with investors Thursday.

Schultz said mobile users represented “a huge prize” for retailers and financial services companies and that’s why there is so much interest in the sector.

“That’s why every tech and financial service company in the world is today chasing the mobile payment opportunity,” he said. But he said that while Starbucks doesn’t have the hardware and software expertise of competitors, it has managed to do something that its competitors, so far, haven’t: change consumer behavior.

“We’ve accomplished this by integrating the convenience of mobile payment to a compelling and enjoyable program that gives our customers rewards,” he said.

Starbucks is seeing growth of 50 percent a year in mobile payments and looking ahead, Schultz said, “the real growth is yet to come.”

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