17 November 2019
More than 600 Starbucks outlets in South Korea offer a  mobile pre-ordering service. Photo:
More than 600 Starbucks outlets in South Korea offer a mobile pre-ordering service. Photo:

Starbucks’ espresso express to a digital payday

There’s no more waiting in line for some Starbucks patrons. The company has rolled out an app in South Korea that lets customers place pickup coffee orders with their smartphone and swiftly pay for them with a scan of a QR code when they go in to collect. 

Starbucks is also testing the app in the United States to see if it can gain traction there. 

Pre-ordering is an extension of the Starbucks app that enables customers to pay with their mobile phone. It could also boost use of the company’s payment platform, making it the firm’s next big earnings driver.

As of March, about 14 percent of Starbucks transactions were done through its app. Chief digital officer Adam Brotman said the group is in talks with other retail chains to use the payment platform to settle transactions with their customers too.

Many companies would like a piece of the potentially lucrative mobile payment system market but it’s a struggle to set the standard. This is where Starbucks has an edge.

Starbucks owns something that the others don’t—its already huge customer base. If a customer is used to paying for coffee with the app, it’s not a big leap to deploy it for other purchases.

Other non-tech firms have been thinking along the same lines. In China, logistics leader SF Express is working on a similar idea. The central bank reportedly granted SF’s financial arm a license to process credit or debit card payments on behalf of a merchant — a sign that SF Express could be ramping up efforts to develop its payment business.

SF Express has even registered two related company names — SF Express Payment and SF Express Bank.

Like Starbucks, SF Express will start with its customers first–merchants, both online and brick-and-mortar stores. But one day it could be a major rival to Alibaba’s Alipay and Tencent’s Tenpay system.

– Contact the writer at [email protected]


EJ Insight writer