OnQ Blog

Starbucks Brews Up Its Own Caffeine Payment App

Apr 16, 2012

Qualcomm products mentioned within this post are offered by Qualcomm Technologies, Inc. and/or its subsidiaries.

This week, two of my two favorite worlds collided—coffee and technology. 

VentureBeat reported that Starbucks’ Android and iOS app, launched just 15 months ago, has processed 42 million payments.  And it did so despite – or because of – being relatively low-tech.

Starbucks offers popular gift/reward cards that can be loaded up with money. Coffee lovers like the cards because they’re easy to use (no fumbling for change), and they receive incentives such as free refills after multiple purchases.  The app piggybacks off this existing system.

To use it, you must first purchase a card. Then, enter its unique number into your smartphone. The app replicates the card’s bar code on your smartphone screen, and stores it for future use. 

To buy a drink, simply tap the app to call up the barcode, and allow the cashier to scan it like a physical gift card.

You can refill your account via the app as well, by inputting your credit card information. You can set it to automatically push a standard amount of cash onto the card when funds run low. And you can check how many free rewards you’ve racked up, and use the app to redeem them.

This mobile payment solution only works in Starbucks stores.  And it’s not as sophisticated as some others, such as Near Field Communications. With NFC, you open a credit app on your phone and tap a special reader to make a payment. The app and reader communicate via a secure, short-range, low-power radio.   

A few credit card companies have joined together with Google in an NFC app called Google Wallet. Others partnered on a yet-to-be-released app called Isis Mobile Wallet. These universal wallets mean that you don’t have to have a separate app for every place you shop.

But they also require you to have a phone with NFC and every retailer to upgrade to a credit card reader with NFC.  That might take a while. In the meantime, the Starbucks solution is a smart stopgap for us technology and coffee addicts. 

UPDATE: The Massachusetts Bay Transportation Authority just announced they’ll bring a similar mobile payment system to their trains. Riders can purchase tickets through their app, rather than waiting in line to buy a ticket from a vending machine.

“When it comes time to show their proof of purchase, the smartphone application will display an animated watermark with a background color that changes according to the day…it also produces a bar code that can be scanned for closer inspection.,” GigaOm explains. The MBTA says it is looking forward to spending less money on buying and maintaining vending machines.

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PJ Jacobowitz

Staff Manager, Marketing, Qualcomm Technologies