No cash, no card, no problem with Starbucks smartphone app

Jan 19, 2011

Technology-savvy consumers could soon be able to leave their wallets behind when picking up a cup of Joe at Starbucks.  

The Seattle retailer is expected to announce Wednesday that customers will be able to use smartphones to pay for goodies at 6,800 stores the company operates in the United States and 1,000 that are in Target stores, according to Claire Cain Miller of the New York Times. 

To pay, customers first have to download a free Starbucks Card app and then hold their phones in front of scanners at cash registers.

John Cook over at Tech Flash shows off how it works.  Some latte lovers in Seattle, New York, Northern California and Target stores have been able to try out the technology.

Cook says despite having fun with mobile payments, he still mostly uses cash because only a handful of Starbucks locations have the scanners that read the app.  The option is also restricted to customers who own BlackBerrys, iPhones or iPod Touches. 

Miller says, despite the limitations, Starbucks is ahead of the pack when it comes to mobile payments.  She acknowledges other companies, such as PayPal and Bling Nation, that are experimenting with similar technology.  But she explains why Starbucks may be the most mainstream example yet:

Previous mobile payment efforts have been stymied largely because it is expensive for retailers to install scanners that read shiny cellphone screens and because Americans have been just as content to reach into their pockets and purses for a credit card as for a phone.

Starbucks says that more than one-third of its customers use smartphones.