Starbucks CEO Howard Schultz says we are witnessing a huge shift in the way people buy things in America, and even though his brick and mortar Starbucks stores aren’t supporting Apple Pay right now, he still thinks it’s great for business.
Schultz appeared on CNBC this morning to talk about Starbucks’ mobile payments where he was taken to quipped by Jim Cramer for bragging in March that Starbucks had a big lead in mobile payments with its Starbucks app, only to get leap frogged by Apple Pay this month.
The Java King was adamant Stars’ currency would be relevant ‘at some point in the future’ but admitted there’s no other company that can get shoppers to change their behavior like Apple.
“Apple Pay is great for Starbucks, because here is a company that has the power and influence to change behavior….Starbucks is going to be in the middle of many conversations…in regards to mobile payments inside and outside our stores.
But there’s no company local, global or national, that has been able to transform behavior the way Starbucks has. Apple hasn’t done it yet, we’re the only company processing 70 million payments a week.
Despite the high praise for Apple Pay, Schultz didn’t mention any plans to add Apple Pay support to stores anytime soon. Starbucks has it has its own competing app that lets users add money to their account and pay at the register, as well as earn loyalty rewards and discounts. The Starbucks iOS app is expected to get Apple Pay support later this year.
Schultz says that Starbucks accounted for 90% of the $1.3 billion in mobile payments made last year. Now that other retailers are jumping onto Apple Pay and other NFC payments, Starbucks’ marketshare destined to shrink in 2014.
You can watch the full interview below:
Buster Hein is a freelance writer who lives in Phoenix, Arizona. Twitter: @bst3r.
10 responses to “Starbucks praises Apple Pay, but you still can’t use it for your grande macchiato”
I went to Starbucks to purposely use Apple Pay. They did not have it so I left without Coffee.. True Story. He is right.. I want to use Apple Pay to buy things. I went to Dunkin Donuts and they did not have Apple Pay. My friend was with me with his Note 3 and could not buy the NFC way either.. So we went to Radio Shack and bought anything except coffee and donuts. LOL – Have not been back to either Starbucks or Dunkin Donuts ever since. I can get coffee and Mc’Ds and use Apple Pay ;-)
Apple Pay currently doesn’t work with rewards systems so it makes sense that Starbucks would keep using their own app. Because their rewards are one of the biggest reasons to go there versus half a dozen other coffee places
You mean tracking of customers
They do work with Passport, on which Apple Pay is based, and can easily be scanned at the register. I do it all the time at Fred Meyer (Kroger), and it has never been an issue.
Its Passbook and not Passport, my friend :p
Apple pay works just fine with rewards systems. as does cash, It just doesn’t provide anything other than the payment component. I want a payment system where I can just pay instantly and discreetly with low transaction cost. I don’t want that simple need tied up with, and confused with attempts to socially engineer the requisition of my private data. They are and should remain two entirely distinct use cases.
“But there’s no company local, global or national, that has been able to transform behavior the way Starbucks has. Apple hasn’t done it yet, we’re the only company processing 70 million payments a week.”
Shots fired. Problem is, he’s wrong. You know what I see on every bus, train, and plane? People looking down at their iPhones. You know what I don’t see? People holding Starbucks cups. So tell us again Howard, who has had a bigger influence on behavior??
This Starbucks CEO betrays a rather small-minded and myopic mindset if he thinks 70 million cups of coffee a week is in any way relevant. Credit card payments are measured in trillions of dollars per week.
Starbucks have their own iOS payment system (one of the only passbook cards I use)
The thing is, its a pre pay system, so starbucks will be making money from interest on the that prepaid cash
I love contact-less payment systems but I would prefer the model be built out with an open architecture. It will be interesting to see if and when the largest franchises will start see this type of payment as a significant revenue source.