Apple Pay to get caffeine boost from Starbucks

Apple Pay will soon be accepted at Starbucks coffee stores, with support from fast food chains KFC and Chilis in the wings.

News of the expansion plans was broken by Apple Pay head Jennifer Bailey at the Code/Mobile conference in California.

Starbucks has already begun a pilot programme in some of its stores, with the goal to reach all of the chain's 7500 outlets in 2016.

The coffee chain already has its own hugely successful mobile payment programme linked to its loyalty cards. Apple announced in June that it would begin offering support for retailer loyalty cards in Autumn, leading to speculation of an imminent tie-up with the Starbucks' reward programme.

The news follows a mixed bag of results for Apple Pay in recent times, with analysts suggesting growth has slowed following the initial excitement surrounding the launch of the service. The company is also facing competition from Samsung, which released its own mobile payments application in the US last month, and retailer-led MCX, which is currently running pilot trials in a number of US states.

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Comments: (6)

James Bell - IBM UK LTD - London 09 October, 2015, 14:35

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I am guessing this is focusing on the US market as ApplePay is already accepted in Starbucks in the UK (as it is as anywhere that supports NFC)?

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A Finextra member 09 October, 2015, 16:31

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Hi James,

I think they probably mean integrated with the Starbucks app, meaning if you pay with Apple Pay you will get your loyalty stars. Currently in the UK you can pay with the app (and load it via Apple Pay or a credit or debit card) and get your loyalty stars, or you can pay with Apple Pay but get no stars. I believe what is being referred to is integration of the two.

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James Bell - IBM UK LTD - London 09 October, 2015, 16:44

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Actually from looking a little further it does seem to just be that Starbucks US are adopting contactless in order to take ApplePay - this article refers specifically that there is no linkage to the loyalty system (which is a shame!). To me though it kind of makes sense that there is no link between the systems - I believe Starbucks loyalty is in exchange for they payment being off their prepaid card whereas ApplePay is running off normal card payment rails - Starbucks wouldnt really want people to move off.

http://www.theverge.com/2015/10/8/9483425/apple-pay-vp-starbucks-will-soon-accept-apple-pay

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A Finextra member 09 October, 2015, 16:56

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But if they wanted people to continue using their app, why would they specifically install NFC to take Apple Pay (as opposed to just upgrading to EMV standard)?

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James Bell - IBM UK LTD - London 09 October, 2015, 17:19

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Well I suppose offering consumers more ways to pay is still better for them if it encourages more business (or makes for happier customers). I guess its unclear whether that theverge arcticle really knows whats going on but it does say no loyalty integration. If that is the case then I would guess they are just upgrading to EMV standard contactless payment and just calling it ApplePay acceptance?

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A Finextra member 09 October, 2015, 18:34

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It is a little bit odd, though, from Apple's perspective, to announce with a lot of hurrah, that they are integrating loyalty into Apple Pay, and then follow up with an announcement that the company with the most successful mobile loyalty program will be accepting Apple Pay, but with no loyalty component.

But I am sure they know what they are doing...