Disruptors
Image: Bloomberg News
Image: Bloomberg News
Howard Schultz
Emerging Payments

Starbucks: 10M Mobile Payments Users, Making 5M Payments a Week

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Nearly 10 million Starbucks customers use its mobile app to make payments, totaling close to 5 million mobile payments a week, the company reports.

Mobile and physical Starbucks Card payments now account for more than 30% of the company's U.S. payments, thanks to a boost in gift card use during the recent holiday season, Starbucks chairman, president and CEO Howard Schultz said during a Jan. 23 conference call to discuss the company's earnings for its fiscal first quarter, which ended Dec. 29.

These figures demonstrate an 11% increase in mobile payments volume during the past eight months. In May 2013, the company reported its customers were making 4.5 million mobile payments a week.

Starbucks launched its mobile card app in 16 stores in 2009 and rapidly expanded the program nationwide. The company allows smartphone users to display a bar code on the phone's screen at the point of sale to access funds from a linked Starbucks Card account. The app also allows users to add funds to their Starbucks Card balance and earn rewards in the My Starbucks Rewards program, which now has more than 7 million active members in the U.S.

The company activated more than 40 million new Starbucks Cards, valued at more than $610 million in the U.S. and Canada, during the past quarter, Schultz says. Leading up to Christmas, the company activated more than two million new cards a day and handled $1.4 billion in loads worldwide during the quarter.

In this way, Starbucks is "one of the very few consumer brands" to benefit from a shift in gift-giving habits that now favors online purchases and gift cards, Schultz says.

This month, Starbucks began offering gift cards in China, and the company reports the product has been well received. Initial card sales in China are "far in excess of our plan, and in many ways mirroring our U.S. experience," Schultz says.

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