January 19, 2011

Starbucks Bringing Mobile Pay To All Locations

As of Wednesday, Starbucks is now allowing consumers in all of its stores throughout the U.S. to use their smartphones to help pay for their drinks.

Consumers can use a pre-loaded Starbucks card and an application to pay at the counter instead of using cards or cash from their wallet.

"To experience mobile payment at Starbucks, customers just need to download the free Starbucks Card Mobile App for select BlackBerry smartphones, iPhone or iPod touch mobile devices," the company said in a statement. 

"More than one-third of U.S. Starbucks customers use smartphones, of which nearly three quarters use BlackBerry smartphone or iPhone mobile devices."

Starbucks is not the only company taking advantage of this new technology.

At some locations, consumers could pay for a meal by using their PayPal account along with the mobile application Bump.

"We are already the leader in mobile payments," Laura Chambers, senior director of PayPal Mobile, told CNN. "We're going to continue to innovate, and we're getting very aggressive about mobile payments in the next two years."

According to research firm Generator Research, those transactions are small slivers of a global mobile payments market analysts estimate at $69 billion in 2009, which is the latest year for which data is available

The firm said that by 2014, mobile payments will reach $633 billion annually, with 490 million customers using their phones to move cash around.

Currently, consumers have to use a barcode that shows up on their smartphones' application in order to pay at a register with their device.

However, a new technology called "Near Field Communication" (NFC) swaps data over very short distances and would allow consumers to not have to scan the bar code on the phone.

Google CEO Eric Schmidt said that the next version of Google's Android would include tap-and-pay functionality and "could replace credit cards."

"The lifecycle of a phone is fast: 18 months. If some of the big players -- like Apple, RIM, Google and Motorola -- all get going with NFC, it could be a standard within two years," VeriFone CEO Doug Bergeron told CNN.


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