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Hold the NFC: Starbucks debuts smartphone-based payments across the US using an app

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Mobile payments have entered the retail market with an unexpected bang as Coffee giant Starbucks announces plans to let caffeine seeking consumers pay for their coffee using mobile payments on selected smartphones in the US through the company’s loyalty app – creating the largest mobile payment programme in the world and not a drop of NFC in sight.

Building on the earlier introduction of Starbucks Card Mobile App on BlackBerry, iPhone and iPod touch, customers now have access to the fastest way to pay at Starbucks in nearly 6800 company-operated stores and more than 1000 Starbucks in US Target locations. More than one-third of US Starbucks customers use smartphones, of which nearly three quarters use BlackBerry smartphone or iPhone mobile devices.

In addition to engaging a loyal base of several million cardholders with the offering, Starbucks anticipates mobile payment will be a draw for customers looking to experience the speed, ease and convenience of paying with their mobile phone.

"Today, one in five Starbucks transactions is made using a Starbucks Card and mobile payment will extend the way our customers experience and use their Starbucks Card," said Brady Brewer, vice president Starbucks Card and Brand Loyalty. "With mobile payment, the Starbucks Card platform further elevates the customer experience by delivering convenience, rewarding loyalty and continuing to build an emotional connection with our customers."

In addition to the mobile payment capability, the app allows customers to manage their Starbucks Card account, check their card balance, reload their card with any major credit card (iPhone users can also use the PayPal feature), check their My Starbucks Rewards status and find a nearby Starbucks store with the store locator feature.

Customers can pay with their smartphone by holding their mobile device in front of a scanner on the countertop and scan the Starbucks Card Mobile App's on-screen barcode to make a purchase. Customers have successfully adopted this technology in test markets in Seattle, Northern California, New York and more than 1000 Starbucks in US Target stores.

Mobile payment is built on the Starbucks Card platform, which continues to experience significant customer adoption. Customers loaded more than $1.5 billion on Starbucks Cards in 2010, an increase of 21 percent over 2009, driven in part by the My Starbucks Rewards programme, which provides benefits to customers who pay with a registered Starbucks Card at participating stores. With the introduction of the quick and easy Starbucks Card Mobile App and the mobile payment feature, customer will find yet another reason to use their Starbucks Card for payment.

"Mobile payment is just one example of how we're continually innovating on behalf of our customers to enhance the Starbucks Experience," said Brewer. "A growing segment of our customers use smartphones, and through the Starbucks Card Mobile App, we're providing them with the fastest way to pay."
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