pay at starbucks with an iphone app!

[maverick]

just saw the coolest thing! you can pay for your purchase at starbucks with your iphone! if you use a starbucks card (benefits include free soy milk / free syrups / free drinks), rather than paying with your physical starbucks card, you can instead pay with the starbucks iphone app!

i love the concept!

and i want to see the credit card companies and banks offer the same option! rather than pulling out my credit card, i would instead pull out my iphone and credit card app to pay! no more, amex / visa / mastercard / discover card / bank atm card to carry - you could instead use an app on your iphone / android / other smart phone like device!

places that use rfid readers for access - offices, mass transportation systems - could also offer the option of access with your smartphone!

even your driver's license data could reside in a smartphone app!

other than your smartphone, the only thing you would need to carry is some cash!

which means, we will need an updated tom bihn wallet! one that accommodates your smartphone and some cash!

this may seem silly, but i am really excited about this concept!

[TXGirl]

Android has an app too! It's very cool & convenient!

[Lani]

Maverick;

[General disclaimer: My husband works for one of the major banks which won a Webby award last year for its mobile apps -- although he himself doesn't work on the mobile app team, he is part of the bigger group that handles all the newfangled stuff (online banking, etc.) so while he isn't an evil banker, I have some general sense of what is available on the banking market. He can't tell me any secret projects they're working on, but I think what I share here with you is already general knowledge for people who are into this kind of thing.]

The technology for this is already available for banks (I mean, it's available for Starbucks, after all). The roadblock isn't on the bank side, but on the retail store side. When you go to the store and pay with your credit card, have you noticed that there's usually a couple of different pay units you come across? All of them currently offer the sliding slot for it to read the mag stripe on your credit card. Some of them also read those smart chips. Some, like the ones at Starbucks, will also interact with your mobile device.

All of these are different technologies, and it costs the stores money to invest in them. Every cash register typically has its own credit card reader, and for them to switch over, costs them money. The thing is, there isn't a whole lot of incentive for the stores to switch right now, because the system they're using is perfectly fine.

A company like Starbucks, on the other hand, can just roll a new system out to all of its stores (for one thing, I believe they are all chains, not franchises) so as long as their corporate office wants to budget for it, they can do whatever they want.

More common than the use of mobile phones, is the use of a smart chip credit card. They are in VERY common use in other countries, and I believe, most of Western Europe. There are places where people carry very little cash, because they can tap their cards to buy soda from vending machines and the like. The main advantage of a smart chip card is that the card reading machine has the ability to immediately authenticate the card. In many European restaurants, when it comes time to pay, the server comes to your table with the credit card reader. You perform the transaction right at the table, so your credit card never leaves your side. This is possible with a smart chip card because the little card reader can immediately verify your information on-site. The mag-stripe version we use in the U.S. requires the card reader to dial up (or go through the store's Internet connection) to contact the bank to make sure your card is good.

Now, a couple of things.

Americans are having a tougher and tougher time when they travel to Europe, because many places no longer accept cards with just a mag stripe. One thing you CAN do, I believe, is contacting your credit card company and asking them to issue you a smart chip card to use during your travels. I believe you can do that with ATM/debit cards as well.

The other thing -- those mobile payment features? You can download one NOW (https://www.chase.com/online/services/quickpay.htm). The catch is, this only works when you are paying someone with another mobile phone or email address... think of it as a mobile Paypal. The TV commercial they have for this app shows a large group of friends out at a restaurant, where they have to collect money from everyone to pay the tab. Everyone just pays one person using their mobile phone. Unfortunately what they don't emphasize enough in the commercial is that as long as one of you is a Chase checking customer, you don't both have to be.

So long story short: Yes, this technology is not new. It's already available. It's just not being adopted. Don't blame the banks on this one; they're trying to get the vendors to adopt it.

Hope that helps!

[maverick]

thanks for sharing the info, lani!

indeed, it will take time for companies out there to embrace the new technology.

perhaps the banks can help with the adoption of the smartphone app solution. there is a cost associated with the bank mailing out a credit card / replacing credit cards when they get lost or demagnetized. so it gives the banks incentive to subsidize the roll out of the updated readers, since in the long run, it will reduce their operating costs.

with smart chip payment cards, it still means yet another card you're carrying for each credit card you have.

[blackfungi]

i recall seeing this already happening in japan. the sim card is like that chip on the c.c. so why not? very convenient.

[Lani]

perhaps the banks can help with the adoption of the smartphone app solution. there is a cost associated with the bank mailing out a credit card / replacing credit cards when they get lost or demagnetized. so it gives the banks incentive to subsidize the roll out of the updated readers, since in the long run, it will reduce their operating costs.

Banks? Subsidize? lol

OK in all seriousness, most people have no idea how much these large companies pay in postal fees. Did you know that these larger banks spend over a BILLION dollars a year on postage alone? And that mailing those monthly statements costs hundreds of millions of dollars to the bank?

Trust me on this one; all of the major banks have paid staff who try to come up with ways to shave weight off of the mailings. If you could switch to lighter paper, or smaller paper, a company can save a few million dollars a year alone.

One of the biggest reasons many banks are pushing online banking HARD (and its accompanying "online billing notification") is because if a customer VOLUNTEERS to switch to paperless, it saves the banks an inordinate amount of money.

As it turns out, there's strong resistant from many customers to go paperless because they like getting something in the mail to remind them to pay their bills. Even if going paperless would mean better security (assuming your email is secure). Nobody stealing your mail from your mailbox, etc.

OK, I'm diverging a bit here. But you get the picture. ^_^

[GEOcycle]

I used the Starbucks app all spring/summer to pay for stuff. There was one across the street from my shop, so a 2 minute walk to coffee ... I became a gold member quickly. (My OLD shop had a locally owned coffee house across the street ... I miss that so much.) The app's pretty slick, I still have it for whenever they allow that sort of stuff here in Japan.

The chip cards is such a great idea, I got to see a lot of that in the UK as my wife is from there. A lot safer too, IMO. Slide the chip in, put in a PIN code and bam ... all set. It didn't cause any issues when I used my US-issued cards there, but they had to pull out some older card readers in some cases from under the register!

While I worked in retail it was always a little funny when people would say "Thank you for checking!" when I would ask for ID when a card specified so. I've definitely come to realize that a signature is no way to rely on for security these days.

Anyways - mobile payments, I love them. They are popular here in Japan with the regular cellphones, nothing yet for the iPhone though. I can use my subway card to buy snacks in the stations though ... always a plus! ;D

[maverick]

Banks? Subsidize? lol

OK in all seriousness, most people have no idea how much these large companies pay in postal fees. Did you know that these larger banks spend over a BILLION dollars a year on postage alone? And that mailing those monthly statements costs hundreds of millions of dollars to the bank?

Trust me on this one; all of the major banks have paid staff who try to come up with ways to shave weight off of the mailings. If you could switch to lighter paper, or smaller paper, a company can save a few million dollars a year alone.

One of the biggest reasons many banks are pushing online banking HARD (and its accompanying "online billing notification") is because if a customer VOLUNTEERS to switch to paperless, it saves the banks an inordinate amount of money.

As it turns out, there's strong resistant from many customers to go paperless because they like getting something in the mail to remind them to pay their bills. Even if going paperless would mean better security (assuming your email is secure). Nobody stealing your mail from your mailbox, etc.

OK, I'm diverging a bit here. But you get the picture. ^_^

it's interesting what different people prefer. i prefer the paperless option myself - it's a win-win-win! it means less mailing overhead for the banks; it's better from an environmental standpoint; it's less paper that i have to hole punch and put into filing cabinets or scan, and then shred either now or a few years from now.

someone was telling me that their financial institution charges a fee for paper statements if you're under a certain age. those over that cut off age aren't charged a fee, i guess because us older folks are set in our ways or it's hard to teach an old dog new tricks or something like that.

[tCook]

I love paying at Starbucks by using my iPhone! This weekend, I was out and about and realized I forgot my wallet. I couldn't buy anything where I was, but I knew I could at least get a coffee. I was so wishing there were more mobile apps available! Definitely register your Starbucks card/s and use 'em - bonus goodies you might as well get if you're already an sbux junkie (see, I love it so much I use the stock exchange symbol).