Paying by Phone Has Whole New Meaning, Growing in Popularity in Arkansas

by Mark Friedman  on Monday, Jan. 14, 2013 12:00 am  

Starbucks Success

The retailers wanting to develop their own mobile wallet might want to imitate the wild success of Starbucks Corp.’s app, which handles about 2 million transactions a week, said company spokeswoman Linda Mills.

Starbucks’ app keeps the information about a customer’s loyalty points earned for free coffee or food.

It also sends messages about coffee sales and free songs to download.

Starbucks is saving money on transaction fees because its mobile app is tied to a prepaid Starbucks card instead of a credit card or debit card.

“That limits the number of transaction fees that we have to pay,” Mills said. She wouldn’t say what the fees were or how much was being saved.

Tackett, of Morningstar Bagels, said her overall credit card fees climbed to 4.1 percent per transaction before she started using the Square to process her payments in November 2011.

Now she pays 2.75 percent per transaction of the cost of the items sold. (Merchants also have an option of paying a flat $275 a month fee. Click here for more.)

Bankers Welcome Mobile

Bankers across the country are welcoming the customer interest that mobile payments are generating.

“In general, the more channels there are for people to make payments, the better that is for banks,” said Stephen Kenneally, vice president of the American Bankers Association of Washington, D.C.

It’s “basically the same sort of transaction that’s being done now with a credit or debit card; just the phone is the device and not a plastic card.”

 

 

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