Late last week, Starbucks announced that it was partnering with Microsoft, BCG and New York Stock Exchange owner Intercontinental Exchange to create a new venture, Bakkt.
Maria Smith, Vice President, Partnerships and Payments for Starbucks, commented: “As a leader in mobile payments to our more than 15 million Starbucks Rewards members, we are committed to innovation for expanding payment options for our customers.”
Various news outlets took this to mean that the retailer would now accept Bitcoin payments in-store. Alas, no. “It is important to clarify that we are not accepting digital assets at Starbucks. Rather the exchange will convert digital assets like Bitcoin into US dollars, which can be used at Starbucks,” it said in a statement. “At the current time, we are announcing the launch of trading and conversion of Bitcoin. However, we will continue to talk with customers and regulators as the space evolves.”
Bakkt will leverage Microsoft cloud solutions to create an open and regulated, global ecosystem for digital assets. This is expected to include federally regulated markets and warehousing along with merchant and consumer applications.
“In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets,” said Jeffrey C. Sprecher, Founder, Chairman and CEO of Intercontinental Exchange.
Crypto critics have dismissed the use of Bitcoin for payments due to its volatility. But whilst Starbucks is not yet getting onboard, the retailer’s flagship role in Bakkt and refusal to rule out a move could see Bitcoin break through as a mainstream currency.
Bakkt is currently in preparation for launch and further details will be announced in the coming weeks.
Ruling the mobile payments roost Stateside
48 million Americans used one or more mobile pay app last year, and that number is expected to rise to 55 million in 2018, with Starbucks leading the way, according to eMarketer.
The coffee retailer’s app will be used by 23.4 million people to make a payment this year. That puts it ahead of Apple Pay (22 million users), Google Pay (11.1 million) and Samsung Pay (9.9 million). Starbucks’ success in this area is down to its early adoption, easy use and a loyal customer base that has been incentivised by a robust rewards programme, eMarketer says.
Meanwhile, other retailers set to gain ground include Walmart, McDonald’s, Target and Dunkin’ Donuts. “Retailers are increasingly creating their own payment apps, which allow them to capture valuable data about their users,” says eMarketer analyst Cindy Liu. “They can also build in rewards and perks to boost customer loyalty.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.