Starbucks Test Store to Accept Mobile Payments Only

By: Jeff Bertolucci| - Leave a comment

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Mobile payments offer a lot of advantages to merchants and consumers alike: They provide cashless, secure transactions via smartphone or other device, shorten checkout lines and enable sales from pretty much anywhere. It’s not surprising that nearly half (46 percent) of U.S. consumers are already carrying out mobile transactions, according to a 2016 study by Pew Research.

Starbucks will soon take the mobile checkout experience a step further by opening a store that only accepts mobile payments and orders. As reported by the Puget Sound Business Journal, the world’s largest coffee chain will unveil a mobile-only location next week on the eighth floor of its corporate headquarters in Seattle. The new outlet will sit across from an existing Starbucks store, Sodo 8, one of the company’s top three U.S. locations for mobile ordering.

Beat the Bottleneck

In addition to exploring innovative ways to serve phone-carrying customers, this mobile-only experiment also helps Starbucks ease bottlenecks in stores. In January, the company said the popularity of its mobile order-and-pay option did more harm than good. Rather than making life easier for customers, the feature created anxiety and congestion in the stores’ drink-pickup areas as employees struggled to keep up with orders, the Associated Press reported.

In a letter to Starbucks employees, Andy Adams, senior vice president of global store development, said the new location is gearing up to serve mobile orders from the company’s 5,000 employees in its headquarters, according to the Puget Sound Business Journal.

Security Worries

Service snafus aren’t the only challenges facing mobile transactions. Breaches to mobile payment systems were one of the top cybersecurity concerns facing CIOs and CISOs last year, according to Websense security analyst Carl Leonard.

Shoppers have their concerns as well. In a recent study by Oxford Economics, 2,000 consumers were asked what’s preventing them from using mobile payments, and 70 percent said they’re worried about their personal information being stolen. Meanwhile, more than half fear mobile money is less secure than cash.

Tap and Pay

These anxieties don’t appear to be slowing the shift toward mobile payments, however, as financial institutions, retailers and other businesses are moving ahead with mobile plans. Wells Fargo customers, for instance, will soon be able to initiate cardless ATM transactions using near-field communication (NFC) technology in certain smartphones, USA Today reports.

Well Fargo’s tap-and-pay feature, available later this year, will allow a user to start a transaction by signing in to one of several mobile wallet services — Apple Pay, Android Pay, Samsung Pay or Wells Fargo Wallet — and holding the phone near an NFC-enabled ATM terminal. Once authenticated, the customer will enter their debit or ATM PIN and complete the transaction.

It appears that mobile payments, despite their growing pains, are here to stay. According to Loup Ventures analyst Gene Munster, Apple Pay adoption at point of sale is growing nicely, in line with the growth of competing digital payment players such as Google Wallet and Samsung Pay.

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About The Author

Jeff Bertolucci

News Writer

Jeff Bertolucci is a Los Angeles-based journalist specializing in technology, digital media, and education. His work has appeared in Kiplinger's Personal Finance, InformationWeek, PCWorld, Macworld, The Saturday Evening Post, The Los Angeles Times and many other publications.