The telegraph. The record player. The VCR. All have been made obsolete by advances in technology.
The wallet could be next.
Starbucks Corp. announced last month that it would begin accepting payment via a new smart phone app in all 6,800 company-owned locations in the U.S. as part of a growing trend of digital transactions.
The Starbucks Card Mobile App acts as a virtual Starbucks card that can be reloaded via gift card or credit card. Bar codes generated on the smart phone’s screen can then be scanned at a Starbucks register.
A Starbucks company spokesperson said in an e-mail that mobile payment tests in Seattle, northern California, New York and more than 1,000 Starbucks locations in U.S. Target stores were very successful.
“Starbucks customers have told us they want a faster, more convenient way to pay for their Starbucks purchases,” the spokesperson said. “The Starbucks Card Mobile App will help provide customers with a fast and easy way to make purchases and manage their Starbucks Card accounts with their mobile phones.”
The app, available for Apple iPhones, iPod Touches, iPads and BlackBerry smart phones, also allows users to check their Starbucks reward status and find nearby Starbucks stores. Credit card information is not stored on the phone. Starbucks has further tightened security on the app by requiring a username and password to authorize reloads and allowing users to lock the app with a pass code.
Monica Adya, an associate professor of management, said any security issues should be temporary.
“There will be security issues, but as we’ve progressed with any sort of Internet-based product applications, there have been more security measures,” Adya said. “We tend to become oblivious to technologies if they’re working efficiently.”
Adya said the move could benefit Starbucks by reducing the cost of processing payments and allowing the company to push real-time advertising to smart phone users.
Mobile card readers that allow small business owners to swipe consumers’ credit cards on their smart phones are already widely used.
Analysts have also speculated that Starbucks’ app could be a step toward widespread use of near-field communications (NFC) technology, in which a chip embedded in smart phones would allow users to make payments wirelessly at a distance of 4 centimeters or less.
The Starbucks spokesperson said the company has looked into the technology but considers the bar code enough to meet its needs at this point.
“Starbucks will continue to explore NFC, but until a majority of our customers have mobile (phones) with NFC chips, we remain focused on our current platform,” the spokesperson said.
Trials with NFC technology have been done by several major companies, including Wells Fargo & Co., Nokia Corp. and Master Card Inc.
Sheikh Iqbal Ahamed, an associate professor of mathematics, statistics and computer science, said in an e-mail that Starbucks’ app is “definitely” a step toward widespread use of NFC technology.
Whether they are through a smart phone app or an embedded chip, digital transactions should make buying more personalized, said Dennis Garrett, an associate professor of marketing.
“What we’re heading to is something that’s going to be even quicker and easier, where there’ll be almost automatic recognition of who you are and what you want to pay for,” Garrett said. “Some people have even talked about, at some point we’ll have chips implanted in us.
“It’s not that crazy.”