Is Starbucks The Future Of Mobile Payment Solutions?

$670 billion. That’s the number that, according to Juniper Research, global mobile transactions will hit by 2015. (Or, according to Yankee Group, as much as $1 trillion.)

But, as of 2010, mobile payments are estimated to have eclipsed just $240 billion. Not a paltry sum, for sure, but still a farshot from the seemingly limitless (or at least huge) number that they are apparently expected to reach in just a few short years.

And ultimately, the goal, as it stands, is to replace to our wallets. It’s to give us alternatives to things like cash (and even credit cards) and cause us to pull directly from bank accounts, or store credit. By replacing our wallets, retailers hope that they will be able to speed up the check-out process (from seconds to, well, a second) and force us to stop using that old, antiquated form of currency called cash.

What Types of Mobile Payments Are There?

And yet, for businesses, there are many different forms of mobile payments to choose from. There are options like Google Wallet or Visa mobile payments that rely on Near Field Communication (NFC) technology to allow people to pay at gas pumps, or store-counters with the swipe of their smart phone or credit card.

Then there are things like Square that essentially turn any smartphone into a cash register, allowing individuals and businesses to accept any form of credit card regardless of their size.

Finally, other options include developing a closed mobile payment system ala Starbucks, and granting users the ability to make seamless purchases through a storefront or a mobile app.

Which One Is Ideal for Businesses?

But it’s difficult to say exactly which option will necessarily be the best choice for every business. The benefit of using such technologies as NFC or Visa (Mastercard, etc.) mobile payments is that the technology already exists. Within gas stations, retail stores and thousands of other businesses, checking out using NFC or a simple swipe of a card is very much a realistic possibility for many businesses, and a large portion of them already do use it. Still, the issues lies in the fact that it really doesn’t change anything. Businesses will still be impacted by the standard credit card fees that have always applied to them.

Square, on the other hand, has the same issue. Certainly, it’s a great alternative for very small businesses in that it can turn something as minimal as a lemonade stand into a full-blown, card accepting business. On the other hand, even Square hasn’t necessarily created a workaround from that often substantial credit-card fee that businesses are charged on every transaction.

Is Starbucks Onto Something?

Of course, Starbucks may have their finger on the pulse of the future of mobile payments. On the one hand, they have managed to develop what, at the time, was an extremely costly to implement solution for mobile payments, forcing them to develop a mobile application as well as equip several thousand stores with the ability to accept Starbucks Card Mobile.

Has it worked? So far, I think even Starbucks will agree that the initial cost was worth it. As of late last year, those payments alone accounted for 26 millon transactions and growing. 

And Starbucks mobile payment system certainly seems like the future for many businesses. For Starbucks, it grants them control over their own payments, even though it may not necessarily be an exact workaround to the credit fees that often cost businesses so much. For consumers, it grants them ease of access and use within Starbucks itself.

In a world with consumers that are increasingly trending towards mobile payments and away from their wallets, Starbucks seems to have discovered something that not only works, but should save them a substantial amount of coin in transactions fees for the future. Eat the cost up front, and save for many years to come.

What do you think is the best bet for accepting mobile payments for businesses?