An Inside Look At The Starbucks App, The Most Successful Mobile Payments System In The US

Starbucks mobile app transactionsBIIStarbucks is doing 6 million in mobile app transactions weekly

While many mobile payment apps like Google Wallet have struggled to gain traction with consumers, the Starbucks mobile payments app stands out as a success.

At 6 million average weekly transactions in the U.S., it now accounts for a full 15% of transactions made at the U.S. Starbucks-operated stores.

In a new research note from BI Intelligence we take a deep dive into how the Starbucks app works, why it’s so popular and whether other retailers could have success with a similar mobile payment model.

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Here are some of the key takeaways from the note.

  • A billion-dollar volume driver: The Starbucks app is on track to process over $US1.5 billion in payment volume in the U.S. in 2014, according to our estimates. In the second quarter it accounted for 15% of the transactions in U.S. company-operated stores, averaging 6 million transactions per week.
  • Customer loyalty to Starbucks plays a role: Starbucks stores are everywhere, coffee is purchased habitually, the app incentivizes regular purchases through its rewards-loyalty program, and the app works on the majority of smartphones. The app’s success is not due to the ease of payment with a phone. So it has succeeded despite the fact that it is not more convenient than credit or debit cards or cash.
  • Opportunities for growth: There are a number of features that could help reinvigorate growth including order-ahead capability and beacon-powered alerts and offers.
  • Other retailers could emulate Starbucks’ success: These retailers include quick service restaurants, gas stations, grocery stores, and pharmacies. Starbucks has said it is in talks to licence the app’s technology as a white label solution.

In full, the research note:

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