At this point, it's nearly a foregone conclusion that Apple will introduce a mobile payments solution next Tuesday, September 9, at its media event to announce the iPhone 6. Apple is said to have signed partnerships with Visa, MasterCard, and American Express, and is reportedly in talks with Nordstrom to upgrade its in-store point-of-sale (POS) terminals to support Apple's new initiative.
It remains to be seen exactly how Apple's system will work, but the company doesn't do anything half-baked. Expect nothing less than a full-fledged mobile payment solution that will be capable of (eventually) working with millions of POS terminals and major credit cards.
For the consumer, however, we likely already have a good idea of how it will work, thanks to the most successful mobile payments service on the market today: the Starbucks app.
For the uninitiated, the Starbucks app allows customers to:
- Pay for purchases via a Starbucks digital gift card; fill their gift card from a credit card, including autofill when the balance gets low
- View transaction history
- Leave a tip on purchases paid for digitally (a recent addition, thanks to community feedback)
- Track "stars," which is Starbucks' rewards currency, and redeem rewards and special offers
- Send gift cards to friends via email
- Receive special offers and a free "Pick of the Week" (usually a song or an app)
- Locate your nearest store with directions, hours, and amenities
This app is very powerful and should really be the model of retail store purchasing apps, particularly for those looking to make quick purchases and turn around customers quickly.
When buying a coffee or baked good at Starbucks, a quick tap on the screen (or a Passbook app stored on the Lock Screen) brings up a digital bar code that is quickly scanned at the register on a reader — the user keeps their phone, the barista doesn't ever need to touch it.
There's no need for a wallet, or to pull out a credit card, and transaction history is saved within the app, so a receipt (and the wasteful paper its printed on) isn't needed either.
For especially loyal customers, Starbucks offers free drinks after a certain number of stars are earned, plus free refills on in-store drinks and promotions related to new products. These are all attached to the user's account and they can be redeemed simply by telling the cashier that you'd like to redeem a free drink or other promo. It's utterly seamless.
A year ago, Starbucks announced that 11% of its sales volume is processed through its mobile wallet, with 4 million mobile payments processed each week and 8 million customers using its mobile app to make payments. These numbers have only gone up since then, and after five years of work, Starbucks has a very mature payments platform.
Now, here's the really interesting part. One of the main managers of the Starbucks Mobile App team is Benjamin Vigier, who has been a project manager of Mobile Commerce at Apple for the past four years. Apple has a healthy mobile payment app for its own retail stores, but perhaps he's been up to more than just the Apple Retail Store app. We'll all find out on Tuesday.
Do you think Apple will take cues from Starbucks with its mobile payment system? Let us know your thoughts and predictions in the comments below.
Jordan Golson is an Apple Columnist for TechRepublic. He also writes about technology and automobiles for WIRED and MacRumors. He has worked for Apple Retail twice and has been writing about technology since 2007.