At the risk of sounding like a broken record, I’m going to say there’s just no stopping Starbucks with its mobile card payments. A mere two months after the coffee retailer announced it was processing three million payments a week (in March 2013, which I blogged about here), CEO Howard Schultz announced in late May that the new number is 4.5 million payments a week. That’s 50 percent growth in two months. And there’s no doubt it has grown again in the last couple of weeks.
I’m not the only one who is noticing this success. We’ve recently seen other consumer brands heavyweights following this trend, getting into the mobile payments and building mobile customer centricity.
One of Starbucks’ rivals, Dunkin’ Donuts, launched its own mobile app last August and just announced that people now have an option to see
the app’s content in Spanish. It’s a clear play to appeal to the Hispanic market, and maybe steal some Starbucks thunder. Another rival, Krispy Kreme
donuts, uses a mobile app to tell customers when the donuts are fresh out of the oven—and has seen a 6.8% increase in same-store sales since the app became available.
Burger King and McDonalds are also kicking the tires on several mobile initiatives. Burger King rolled out a mobile payment pilot lastJune in Salt Lake City, Utah. Like the Starbucks and Dunkin’ Donuts apps, the BK app works in conjunction with a re-loadable loyalty card, the BK Mobile Crown Card. The fast food hamburger chain also just announced that it now accepts MasterPass, the digital wallet from MasterCard, on its BK Delivers online orders. McDonald’s
is testing a mobile payment system in Canada based on NFC and debit card accounts.
Whether we call these companies “fast food chains”, “consumer brands” or “retailers”, and I believe they are all three, we are seeing them lead mobile payments in North America. The leaders are not the typical financial services companies or mobile network operators that we’re seeing in other countries.
So what’s happening with the banks and the other players in the U.S. market? Apparently, Google Wallet with its NFC initiative has spent $300 million in acquiring payment startups to bolster its digital wallet product. This on top of internal resources dedicated to making Google Wallet a success.
It is believed that Isis, the U.S. telecom consortium on NFC, has also thrown similar numbers at its initiative, with limited success.
So, why are we seeing so much more success with the retailers and consumer brand companies? For one, I believe these consumer brands and retailers understand clearly the value of owning the direct relationship with the customer, especially now that they are all digitally connected 24/7, 365 days a year, and payment is only a very small part of the story. Brands like Starbucks already have that face-to-face customer relationship with loyalty cards, promotions, coupons, etc., and are now extending this to the most customer centric channel we have: the mobile phone. Isis has no relationship like this with the customer today, and Google’s is a digital connection, which is yet to translate to physical. Food for thought?