Typically merchants post signs at EMV terminals to tell their customers how they work, or that they should keep swiping. Starbucks is taking a more forward-thinking approach by treating EMV frustration as a mobile marketing opportunity.

Starbucks has apparently decided to promote its popular mobile payment app, with a note asking, "Want to Pay Faster? Download the Starbucks app" right at the slot in which EMV cards are inserted. It also notes that the app is available at the App Store or Google Play.

Jordan McKee, a senior payments analyst with 451 Research, spotted a terminal with that display at a Starbucks in Boston and posted it on his Twitter account. Starbucks did not respond by deadline to an inquiry about whether the marketing strategy was in place nationwide.


"Marketing at the POS is an excellent avenue to gain consumer mindshare, particularly when the marketing is in reference to a widespread pain point – in this case EMV," McKee said. "For retailers, the silver lining of EMV may be that it provides a latent opportunity to guide customers en masse toward their own branded mobile payment experience."

As more retailers launch branded mobile wallets in 2017, McKee said he expects this tactic to be emulated by other merchants.

Ironically, Starbucks is the one merchant that is least likely to need this extra marketing push for its mobile app. The Seattle coffee chain reports that 25% of its transactions during the fiscal fourth quarter were from mobile payments, up from 20% last year.

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Twenty-five percent is a staggering number relative to other retailers' mobile payment numbers, but it still leaves three-quarters of the coffee-buying public reliant on older payment methods. Any who were on the fence about downloading the app may view this conspicuously placed marketing message as the final push they needed to switch to mobile.

"It's a good reason to offer downloading the app because it adds a lot to the customer experience equation," said Thad Peterson, senior analyst with Boston-based Aite Group. "We have always been talking a lot about the value proposition of mobile, and this puts the value proposition right in the face of the consumer."

Starbucks will soon be able to count on more customers entering its stores with the Chase Pay mobile app on their phones as well. Chase Pay is expected to be available to consumers early next year. JPMorgan Chase and Starbucks have already agreed upon including Chase Pay in the Starbucks app as well as working together on a Starbucks Rewards Prepaid Card with Visa's brand.

To promote retailer apps at the point of sale represents "a convergence of two ideas," Aite's Peterson said. "One is clearly an opportunity to decrease friction for the customer and get them through the line faster, but it also gets an increased interest in retailer apps."

In the meantime, the card brands have given merchants the option to integrate POS software that will decrease the time of an EMV chip transaction from about 12 seconds to 2 or 3 seconds. Visa's version is called Quick Chip, and Mastercard's is M/Chip Fast. While the card brands claim progress with the faster chip transactions, merchants have generally been slow to upgrade POS terminals.

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