Purchasing a Latte with my iPod Touch

On the evening of September 23rd, I learned I could finally ditch the Starbucks gift card I carried around in my wallet in exchange for downloading an app. The free app is called Starbucks Card Mobile and works on both the iPod Touch and the iPhone.

After downloading the app, I was prompted to enter the 16-digit code on the original Starbucks card I owned and the 8-digit security code underneath it. It didn’t appear there was an option to simply set up an account. Additional cards can be added as well. Once the card is added, you will need to add your billing information (you can add several credit cards) and then load a dollar amount to the Starbucks card. A limited time bonus of $5 will be credited to your account if you load a minimum of $25 to it.

The only problem I had while setting up my account was loading the $25 (of course I want the $5—that’s a free latte). When I selected the dollar amount and hit apply an error message came up ‘An unexpected error occurred. Please try again or come back later.’ I tried again and it still failed to add the $25. Hoping I hadn’t just added $50 to my card, I clicked the Refresh Balance button. Still $0. It was midnight by this time so I figured work was being done on the system, causing the error messages. I waited until the morning and tried again, this time successfully. I hit refresh and suddenly there was $55 on my card. Looking at the transaction history later on, it turned out one of the midnight transfers did go through. A bit annoyed that I put more on the card than I intended, I was still excited to test it out.

When discussing the future of e-commerce and consumer transactions via mobile device with friends, the topic always went back to credit cards. The consumer is protected when using a credit card service so there is a trust factor, but how can an operation gain the confidence of a consumer and how can they profit from it? The discussion then turned towards debit rather than credit. Starbucks has acknowledge security issues by requesting that the user enter a password before reloading a card, so if your mobile device is stolen, there’s no way someone can get free grande Caramel Macchiatos for the rest of their life. In addition, if you set up an account on Starbucks.com, you can report the card lost or stolen. If you’d like to add even more security to your Starbucks Card app, you can assign a password to it that is required during launch. In terms of profits, I’m sure this will come in the form of marketing data and customer loyalty.

Eager to try out the new app, I had to find out which store would actually accept it. Only 16 Starbucks stores between Seattle, WA and Mountain View, CA are testing it, even though the iTunes stores says they’re accepting them in Cupertino, Sunnyvale, and San Jose too. In the app under Payment Trial, it currently has a zero next to Participating Stores but the demo video shows locations spread across Mountain View. I decided the only up-to-date source would be on their corporate site. http://www.starbucks.com/mobile-apps/StarbucksCardMobile/

There were rumors that a user could order a coffee via the app and then scan a bar code with all the payment info in it to transfer the amount due. The second part was true, but I can’t seem to find a way to order a drink before I even walk into the store. There’s a myStarbucks app I haven’t tried, but it seems to be a social app rather than an app one can use to order from.

The eyes of the Starbucks employee who was taking my order lit up when I asked if I could use the app. He said “you’re my first app customer!”. Being in the center of Silicon Valley, I considered it an honor. He whipped around the bar code scanner, I opened my app, clicked the Touch to Pay button, held it up to the scanner and then heard a ‘beeeeeep’. An error message showed up on my screen. After he pressed a couple of buttons on his register, we tried it again. This time, even though another error message came up, the transaction went through. My app wasn’t refreshing the amount left on the card so he gave me a receipt for proof of payment. By the time that was done, my latte was ready.

I like the app and can see it becoming a pioneer of micro mobile debit cards. Now that I’m in the Starbucks system, I’m predicting I’ll be receiving coupons and offers via email. If I can manage those through my account and even on my mobile device, I can see my trips to Starbucks becoming more frequent. Apple and Starbucks have a good relationship because of iTunes and I trust this will make it even stronger.

Here are some more details about the Starbucks Card app:

• Create your Starbucks Card account using your email and a password. From here you can check your balance, set up auto-reload, and sign up to receive email offers. The app closed once I created the account. Upon relaunch, the card info appeared to be lost and I had to re-enter it. Account will be active on Starbucks.com, but info will have to be re-entered and registered in order to manage your card(s) via the site.
• You can enable auto-reload (off is default) by choosing a dollar amount when balance falls under a defined amount (ie. add $25 when balance falls under $20).
• When you click on the main screen’s balance amount, a menu will appear where you can reload the card, refresh the balance, set up auto-reload, and view recent transactions.
• Under Payment Trial, there’s a short video called How Does it Work, as well as Participating Stores button (currently 0), and an Enable Payments slider (set to On).
• Under Settings you can add cards (new or pull from account), delete cards, change billing info, set a passcode (security code to open the app), get app info, read terms of use, and access the help section (rewards, mobile payment, account, reload/auto, security, lost/new device, other).
• For security purposes, sessions time out.