Starbucks Hits a Mobile Milestone: One in Five Payments Are Mobile

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Starbucks now handles nearly nine million mobile transactions each week in its U.S. stores, representing 20% of sales and more than double the figure it reported two years ago.

"Our mobile commerce platform is literally stronger than ever," said Howard Schultz, the company's chairman and chief executive, in a July 23 conference call to discuss the company's earnings for the fiscal third quarter, which ended June 28.

A major contributor of this growth is the relatively new Mobile Order and Pay capability, which is still in trial mode but has expanded rapidly to 4,000 company-owned stores. The Seattle-based company expects to take mobile ordering capability nationwide by the holiday season, and to bring it internationally in the coming months, Schultz said. It is also planning to bring the capability to its Android app.

At stores that accept mobile orders, "lines are shorter, service is faster and in-store operations are more efficient," Schultz said.

Starbucks has long attributed the success of its mobile payment system to its rewards program, and is entering "carefully curated, customized digital partnerships" to expand the reach of its rewards currency, he said.

Companies like Spotify and Lyft, which have a strong emphasis on mobile, will be able to give out Starbucks stars as rewards to their own customers. These stars can be redeemed only through Starbucks.

Starbucks began accepting payments through its mobile app in 2009.


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