Starbucks café customers like its mobile pay app almost as much as the coffee. As the following USA Today article reports, the Starbucks single-merchant mobile app leads the field for mobile pay at POS apps when compared to the Pays: Apple, Google, and Samsung.
When it comes to mobile payments, most people likely think of Apple (NASDAQ: AAPL) Pay or Alphabet‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Pay. However, a recent eMarketer study found that Starbucks (NASDAQ: SBUX) actually has the top proximity mobile payment app in the United States.
Moreover, eMarketer expects Starbucks to maintain that lead for the foreseeable future, with its 23.4 million users in 2018 rising to 29.8 million by 2022, compared to 27.5 million users on Apple Pay and 14.9 million on Google Pay.
eMarketer analyst Cindy Liu called the Starbucks app “one of the bigger success stories” in mobile payments, and attributes that success to its ability to tie payments to its loyalty rewards program. Liu noted that the value of paying with Starbucks’ app was “clear and simple,” since customers can “save time and money at the register, all while racking up rewards and special offers.”
Many other companies, including Walmart and Target, integrated mobile payments into their own apps for similar reasons. It’s clear that the battle in mobile payments won’t simply be fought between the titans of tech — it will also involve retailers’ first-party apps.
It’s no surprise that Starbucks mobile app success is due to the integration of features that draws customers to visit frequently and spend more. What is surprising is that the universal mobile app pays have not given consumers more reasons to use their apps other than just to make a payment. Which is why we find that it will be individual merchants that will drive wider adoption of mobile pay at POS similar to what Starbucks has achieved.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group