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Mobile payments

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Starbucks is seeing impressive adoption of mobile payments in its U.S.-based store locations, the company revealed during its quarterly earnings conference call last night (via WSJ). Mobile payments crossed the 10 percent mark in the U.S. as a percentage of in-store purchases, indicating efforts like the Starbucks mobile app, Apple’s Passbook and Square Wallet are popular among users.

The coffee franchise is pushing forward with more mobile-focused initiatives, including the installation of wireless charging mats in select locations. The Powermat-supplied wireless charging initiative follows a trial of 17 locations in Boston, and will roll-out in Silicon Valley throughout August. The standard it uses is the Power Matters Alliance variety, which unfortunately doesn’t work with phones that use the Qi standard like the Google Nexus 4. Still, a growing number of companies are joining up with PMA’s standard, and Starbucks’s continued support should help it appear in more devices.

The lesson here is that Starbucks is putting a lot of weight behind its mobile digital initiatives, and those efforts are bearing fruit. Starbucks Chief Digital Officer Adam Brotman said on the call that its “various digital initiatives have added demonstrable impact to our U.S. business in the third quarter” and promises to do even more for the company with continued investment.

Pay-by-app in this way kind of defies what many thought about mobile payments in the early days, that it would be enabled by one dominant provider and come in the form of a single wallet provided by a single ruling platform creator, and that it would be enabled by NFC or something similar. The Starbucks method involves a variety of different payment options and uses traditional barcode scanning to function, and yet it’s very popular. This seems to be because it’s convenient, easy to find and carries familiar branding from multiple trusted sources.

While we still mostly pay with traditional methods, the Starbucks example is a good illustration of how mobile-enabled commerce can work if the conditions are right and the source in question has the clout to push it through. But the Starbucks model is an island, which means we could see continued growth in mobile payments on a case-by-case basis instead of as a sweeping trend that trounces cards and currency in one tidal push.

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