Mobile Monday: Starbucks Adds Floating Balance to Mobile App

Mobile Monday: Starbucks Adds Floating Balance to Mobile App

starbucks mobile balanceIn a major update last week (v4.3.2, 30 Jan 2017), Starbucks added a floating balance to its mobile app main page. So instead of navigating to the pay tab within the app, users always see their card balance as soon as they launch the app. And the balance stays floating in the lower right corner no matter how far down the page you scroll.

Furthermore, clicking the green button grays out the page and brings up two options tethered to the green button (see screenshot below):

  • Order
  • Reload

It’s a small thing, but it helps users know before they get to the front of the line whether they have enough funds in their prepaid account. It is also a good shortcut to the card reload function, though I’m not sure how many users will know/remember it’s there.

Bottom line: Banks should make sure that the balance is visible on all areas of their debit card interfaces. It’s an even worse user experience to find out you don’t have the funds after you’ve ordered your meal or rung up your grocery store purchases.

starbucks mobile reload order

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services UX consultancy. 

Mobile Monday: Helping Customers Understand EMV & Mobil Payments

Mobile Monday: Helping Customers Understand EMV & Mobil Payments

emv_dipThis week’s EMV “liability shift” in the United States is expected to be a boon for mobile payments. We are undergoing a massive expansion in number of NFC-enabled terminals, at a time when Apple and Android Pay are not only measurably faster than the more time-consuming “chip dip”, but also more secure. That’s a HUGE change in the “relative UX” between the two options.

Savvy issuers should seize on the negative publicity and confusion around EMV plastic cards and push NFC options, both within the native app and on desktop and mobile websites.

But from what I saw today during a tour of several dozen major bank and credit union mobile sites (using iPhone 6), very little is discussed about this change. In fact, none of the 25 largest banks address it on their mobile homepages. I finally found one mid-sized credit union that addressed EMV (First Tech Federal Credit Union) and another that mentioned Apple Pay, albeit a few screens down (Stanford Federal Credit Union), but neither of them addressed both issues (see screenshots below). Both CUs have responsive homepages, so the messaging was the same on both the desktop and mobile web.

Most issuers address basic EMV questions when sending new chip-cards to customers. But I’m guessing that:

number of cardholders who read the EMV instructions
the number that understood it
the number that remember it

This is a good opportunity to get your cardholders on board with Apple Pay and Android Pay. And don’t forgot to help them understand how to make your card the default in the Apple Wallet (previously called Passbook). Refer to Capital One’s email explanation sent to cardholders after adding their card (screenshot below).


Mobile website homepages from Stanford Federal Credit Union (left) and First Tech FCU (right)
As seen on iPhone 6 at noon, 28 Sep 2015

stanford_FCU_mobilehome 1sttech_mobilehome


Capital One email sent to cardholder minutes after adding card to Apple Pay and authorizing through Capital One mobile app (28 Sep 2015)



FinDEVr2015LogoV2DateWe will be addressing issues in EMV, mobile payments, and much more at Finovate’s second annual developers’ event, FinDEVr, 6/7 October in San Francisco.


Help, My Apple Pay is Not Working

Help, My Apple Pay is Not Working


The last few times I’ve tried to use Apple Pay, it’s not worked. And when that happens at the POS, you pretty much look like an idiot waving your fancy phone around and smacking it against the terminal (as if that would help). So yeah, I’m that guy holding up the line, although in my defense, not nearly as long as that person that still uses paper checks.

When Apple Pay is on the fritz, besides my looking like a fool, I’m at a bit of a loss as to what to do next. I tweeted this today:

While it may appear snarky, it’s a serious question. When Apple Pay doesn’t work, there is no clear path to resolution. So here is what happened when I tried the various methods in my tweet.

A. Google it

At first glance, there seems to be promising results, including Apple Support. But alas, its FAQ makes no mention of it “not working,” but it does offer a way to get through the help topics and to an online/phone support area (see C below). And while there is much discussion on the Apple forums, the best advice was to “reboot” your phone, which is surprisingly effective for many.

Grade: Incomplete. While I was able to find Apple support within a few minutes, I had to go to the chatbot for a full diagnosis (see B below)

B. Contact Apple

applepay_support_choicesDuring my Google search, I stumbled into the correct area to get to Apple Care support (see A above). While I had to go through a few screens in the self-service area, it took only about 30 seconds to get to the one that offered a choice of online chat, call center (with 2-minute estimated wait time), or alternatively, I could schedule a call (see inset).

As always, I chose online chat. The chatbot was good (not sure if/when a human stepped in), but it took a full 13 minutes to diagnose the problem (including looking up my serial number at the outset). Apple suggested I delete the existing payment card and add the new one, which was the right answer.

If you try to figure out the problem directly on your phone, a search for “Apple Pay” within the phone, i.e., Spotlight Search, directs users to the Passbook app. If you select the “i” button for more information, you are directed to the bank’s call center (see C below). Alternatively, you can navigate directly to Settings, find Passbook & Apple Pay (below the fold), and locate the bank contact number.

Grade: C >> for the 13 minutes it took through Apple Care chat support

C. Call the bank (BofA)

I had just a single card, issued by Bank of America, hooked to Apple Pay. Although I try to avoid call centers if at all possible, I have been very pleased with BofA call center support in the past, so I called the number on the back. And while SIRI, or whatever their voice recognition is called, was not able to understand Apple Pay questions (“I hear that you want to make a payment, is that right?”) I had passed authentication and was put through to a live operator in about 3 minutes. I’d already figured out the problem during my 13 minutes with Apple Care (old card number), so I didn’t torture BofA and play dumb. But had I not known the answer already, the CSR was prepared to get Apple Pay support on the line for help.

Grade: B- >> for being able to get to Apple Pay phone support within 4 to 5 minutes (though did not test their diagnostic skills)

D. Use the mag stripe

Honestly, if I wasn’t into this stuff for my job, I would have just started using the mag-strip card and forgot about Apple Pay until v2.0.

Grade: A >> for the 5 to 7 seconds it took to get the plastic out of my wallet, swipe, and stop holding up the line


The fix

bofa_applepay_dontuseAs mentioned in B above, my Apple Pay problem could be solved either through the Passbook app itself or through the Passbook settings within the iPhone Settings area.

Here’s what I saw when clicking on my “card” in Passbook (see inset).

And that was the reason why Apple Pay had stopped functioning. Bank of America had revoked my card a few months prior during a breach-related reissue.

But I’m not sure how I was supposed to know that I needed to update my Apple Pay card. I’ve searched my email from Bank of America, but I see no message from them on the subject. While it could have been trapped by the SPAM filters, that would be unusual for messages from my card issuer.

It’s completely understandable why the bank would pull my card out of Apple Pay if it was cancelled and replaced by a new number. But they either need to inform me, along with good instructions on what to do next, or better, simply replace my old card with the new one within Apple Pay, with notification of course (see update below).

But that’s probably v2.0 customer support. Until then, I’m glad there’s still a mag-stripe as backup.


Update 19 Aug 2015: Apparently, Citibank is automatically replacing new card numbers into Apple Pay when the old one is canceled. Not sure if this applies to its entire portfolio or selected customers. Thanks to Ian Kar for the pointer.

Finovate Debuts: Bendigo and Adelaide’s Mobile Wallet Has a Charity Play

Finovate Debuts: Bendigo and Adelaide’s Mobile Wallet Has a Charity Play


Australia’s Bendigo and Adelaide Bank (Bendigo) has long been known for its philanthropy. Its Community Bank branches, which enable local communities to own and operate a Bendigo Bank franchise, have contributed $125 million to local projects and charities. At FinovateEurope 2015, the Australia-based bank debuted redy, a mobile payments platform with a charitable element developed specifically for Bendigo by its subsidiary, Community Telco Australia.


  • Fifth-largest bank in Australia
  • Has almost 900 branches and agencies across Australia
  • $52 billion assets under management
  • $3 billion market cap

Redy positions itself as a community ecosystem more than a payment ecosystem. The local rewards system enables customers to earn creds (points) for every transaction on the redy platform. Creds add up to 0.5% of customers’ transactions, and can be donated to local charities or causes, or used in exchange for a discount toward a future purchase.

By offering customers an easy way to give to causes they care about, redy helps small businesses connect with customers.

For merchants

To begin using redy, Bendigo must first approve the merchant and set them up with a business account and a redy point-of-sale tablet.

Redy charges merchants a membership fee of $25 per month and a transaction fee of 1.5% of each purchase, 0.5% of which is returned to the customer to use as creds. The creds system offers businesses a way to encourage repeat spending and gives them an easy way to support local campaigns and charities.

RedyMerchant The Redy merchant terminal

Merchants also receive access to reports and analytics of transactions on the redy platform.

For customers

Customers download the free redy mobile app on their iOS or Android device, and link their Visa, MasterCard, or Bendigo savings account.

When ready to pay at a business that accepts redy, the customer enters their PIN, scans the QR code on the merchant’s tablet, and confirms the payment amount. The payment is secure and does not transfer the customers’ financial data to the merchant.

The redy system sends the customer a digital receipt. The creds the customer earns from the purchase are automatically credited to their account and ready to be donated or applied toward a repeat purchase.

RedyPaymentMethods Redy payment methods

For charities and local causes

Charities that register with Redy can tap into the pockets of Redy shoppers, who may opt to donate their creds to causes that matter to them and their community.

Here’s a sample of causes and charities registered on Redy:


Bendigo and Adelaide Bank debuted redy at FinovateEurope 2015 in London.

Finovate Debuts:’s Mobile Wallet Review

Finovate Debuts:’s Mobile Wallet Review

onlinepay-home has created a mobile wallet for shopping, topping up online accounts, and P2P payments. The app, which it debuted at FinovateEurope 2015, launched in the Apple App store last December.


  • Founded 2014
  • Established in Singapore
  • Partnered with e-commerce and gaming companies

The app is targeted toward millennials. It functions as a prepaid mobile wallet with three main features:

  1. Shopping
  2. Social Payments
  3. Services

The features, along with the user’s wallet balance, are displayed on the home screen:


1) Shopping

Users browse items in the in-app shopping mall. When they find something they’d like to purchase, the entire transaction is handled within the app.

E-commerce companies partner with OnlinePay to add a button to their checkout flow that enables customers to pay using their mobile wallet balance. Retailers can also send targeted offers such as the one above.

2) Social payments
Similar to Venmo, OnlinePay makes P2P payments social by enabling users to share their payment history with others. An activity feed broadcasts to the entire network of OnlinePay users or just to their group of friends. Users can elect to keep their payment activity private.


3) Services
With the Services tab, users top up Forex trading accounts or purchase online gaming components, which are instantly applied. Users are not require users to exit their Forex trading application or leave their game to make purchases.

The company offers 24/7 chat support to resolve any issues. Users can also use the feature to chat with their friends.

OnlinePay debuted its mobile wallet at FinovateEurope 2015.

First Look: Starbucks Mobile Order & Pay

First Look: Starbucks Mobile Order & Pay
Order Ahead Display in Starbucks store
Order Ahead Display in Starbucks store


Living in the epicenter of the Starbucks empire, I have followed the caffeine-dispensing giant closely since the beginning. What I would not have guessed 20 years ago, is that it would emerge as a payment pioneer. First, the company was at least five years ahead of its time with gift cards. Now, it’s doing the same with mobile payments/rewards.

And Starbucks continues to innovate. Just this week, the company widened the beta rollout of its remote ordering option, Mobile Order & Pay, to 650 stores in the Northwest. And luckily this includes my home turf in Seattle, so I had a chance to use the service on its first and second day (March 17 & 18).

Here’s my first impressions:

  • It’s no gimmick: There are real user experience and operational gains. Unlike Apple Pay, or even the Starbucks app, which arguably take longer than a simple credit card swipe, there is a material time saving for the mobile order & payment process. Once your drink order is saved (see screenshot below), it takes only about 15 seconds to order AND pay. Even if there were no queue (unlikely), that’s still a significant time savings over the usual ordering process. And the labor savings over time could be significant, especially in relatively high-wage areas, such as Seattle where the minimum wage is scheduled to move to $15 .
  • Pushes usage to stored payment credentials: There’s a reason why Starbucks added “Pay” to the name. They clearly like making the payment invisible. In the past, I’ve opted to top up my Starbucks account (via credit card) at the counter, since I was there ordering anyway. Now, I’m going to do all that in the mobile app. Again, another labor savings for Starbucks and an opportunity for issuers to make sure their card is loaded into the Starbucks app, PayPal, or in Apple Pay, since those are all reload options.
  • Drives more business: While remote ordering is seen initially as a convenience for existing users, it’s also a powerful tool to drive additional store traffic. In an unfamiliar area, you simply open the orders tab and instantly see the closest store, GPS-guided directions and an estimated time to get there, either walking or driving. A great use of map


The app shows 3-minute window when order will be ready along with driving directions.
The app shows 3-minute window when order will be ready along with driving directions.


Previous orders are saved in the app for quick reordering.
Previous orders are saved in the app for quick reordering.
Users can reload the Starbucks mobile app using Apple Pay, PayPal, or credit card
Users can reload the Starbucks mobile app using Apple Pay, PayPal, or credit card


Apple Pay Works (Duh), But it’s No Starbucks (Yet)

imageWell, that was anticlimactic. But I knew it would be.

Between Starbucks mobile, Square Wallet, Google Wallet and my Discover Card contactless sticker affixed to the back, I’ve made a few hundred in-store purchases with my phone.

So smartphone purchase #247 today was hardly remarkable from a UX standpoint. The only thing that would have made my first Apple Pay experience interesting would have been if it failed (resulting in a much more clickable headline for this post). But although it took three tries (note 1), the phone finally vibrated (the same as my Nexus) telling me that Apple’s NFC magic had indeed triumphed (note 2) adding 1.05 cent to its Q4 numbers (note 3).   

And although I firmly believe we are at “peak plastic” for debit/credit cards and payment via the cloud is inevitable, I don’t see how Apple Pay adds 15 BPS (or a half-cent for debit) of value to the card-using experience. But to play with Apple you have to pay. And 15 BPS is a lot better than the 30% interchange Apple has collected for the past six years on in-app purchases. So I’m neither criticizing the rumored economics, nor the 500 issuers who have signed on. For competitive reasons, you might as well play along (or not, see previous post). 

Bottom lineI’m not giving up on plastic, or merchant-specific apps like Starbucks (or MCX?), quite yet. The iPhone/TouchID experience is great, but at this point, it’s slightly more cumbersome than plastic (note 4) and costs more if you account for my tendency to drop the phone (note 5). 

And Apple Pay’s consumer value for in-store purchases will come in the future with more integration between phone, bank and merchant (note 6). Getting customers to give up plastic is all about the three R’s: rewards, receipts, and relationships (note 7). Starbucks has nailed it (note 8). Apple has not, yet.



My first Apple Pay in-person transaction
Left: Push notification on top of homescreen
Right: How it looks within the Apple Passbook app

image       image


1. The first time I put the phone next to a terminal, nothing happened when I authenticated with TouchID. I’m not sure if it was my phone’s failure or the cashier failed to ready the charge properly. The second time, it did connect, but I was declined with a negative “buzz” from the phone. The cashier readied the charge a third time and this one went through with a pleasant vibration and push notification on the screen. These things happen, even when swiping plastic, so I don’t hold it against Apple Pay. That said, were I a so-called normal consumer, I probably would have pulled out my plastic and waited for Apple Pay 2.0 next year before trying again. 

2. Sadly, I still had to make chicken scratches (aka my signature) on the Verifone display at Bartell Drug for the $6.99 box of tea and also have a paper receipt shoved into my hands. It’s not Apple’s fault, but it does detract from the overall UX. 

3. My $6.99 purchase times the rumored 0.15% interchange rebate to Apple. 

4. I’ve been using TouchID only a month, but so far, I find it clumsy. I have three fingerprints registered, and some work better than others, and overall, I find it can take numerous attempts to get it to authenticate. This is not something I want to experience at the front of the checkout queue. It’s bad enough that I’m standing there waving my new $600 gold smartphone at the terminal. I don’t need to be holding up the line while I fumble with said device. Once the novelty wears off, I’ll probably go back to swiping plastic, at least if there’s a queue. 

5. In addition, every time I pull my phone out, especially when juggling purchases at the point of sale, there is a chance I’ll drop it. And since I detest cases, I crack my screen every year or two. Assuming it costs $100 to fix, and I crack it once every 5 to 10,000 times I handle it, it’s cost me 1 or 2 cents to use my phone in lieu of plastic. 

6. This post is about the physical point of sale. The one-click mobile-payment process for Apple Pay-powered shopping carts and apps has immediate and understandable value for both the consumer and merchant. 

7. You could argue that the increased security from phone payments will move people off plastic. But consumers still do not trust mobile phone security, for good reason. And they know they are covered for plastic security breaches. So the known threat (plastic) probably trumps the unknown (phone) for the time being. 

8. And the Starbucks experience gets better next year when “order ahead” goes national.

Banks Gear Up (or not) for Upcoming Apple Pay Release

image If all goes well, some time within the next week Apple Pay will be up and running. Short-term it won’t cause a ripple in market share or consumer behavior (see previous post), but long-term it is likely to be seen as an important mobile-payments milestone.

Regardless, I look forward to using it. But with only a couple contactless terminals in my usual Seattle haunts, I guess I’ll be buying lots of coffee at Peet’s and Tully’s while I test it.

But I digress.

imageThe subject for today is what banks are and aren’t doing to ride on Apple’s mobile coattails. There has been little FI marketing so far, other than PayPal’s NY Times full-pager poking fun at it (15 Sep 2014, see inset). And some media buys from Visa and MasterCard.

Eleven financial institutions were named on 9 Sep 2014 at the official launch of Apple Pay: Six major launch partners listed below and five “coming soon” issuers (see note 1).

The big six have been almost silent since the first week when four of the six issued press releases, emailed customers (note 2) and/or posted promos on their websites.

Issuers may now be gearing up their marketing machines, which were caught relatively unaware last month, due to Apple-prescribed secrecy, for a pre-holiday Apple Pay push. However, I would not be surprised if major issuers, who’ve already seen contactless card-usage fizzle, take a wait-and-see approach for the remainder of 2014.

In any event, it will be interesting to watch. 


Apple Pay FI launch partner marketing to date

American Express 
   Press release: No
   Email: None reported
   Website promotion: None reported
   Website site search: Nothing listed

Bank of America
   Press release: No
   Email: One reported by The Financial Brand (link) though I did not receive it    
   Website promotion: Nothing now, but promo reported at launch by Jim Marous in The Financial Brand
   Website site search: Links to landing page (link)

Capital One
   Press release: link
   Email: One sent to my consumer account (12 Sep 2014)
   Website promotion: None reported
   Website site search: Nothing

   Press release: Quoted in Apple’s official release (link)
   Email: One reported by MediaLogic (link) though I did not receive it    
   Website promotion: Nothing now, but promo reported at launch by The Financial Brand
   Website site search: Nothing

   Press release: link
   Email: None reported
   Website promotion: Nothing now, but promo reported at launch by The Financial Brand
   Website site search: Nothing

Wells Fargo
   Press release: link
   Email: Two sent to my consumer account (11 Sep and 19 Sep 2014)
   Website promotion: Nothing now, but promo reported at launch by The Financial Brand

   Website site search: Nothing


Second wave issuers

Perhaps because they are smaller and must try harder, three of the six next-wave Apple Pay issuers (note 1) have promos running on their websites today:

Barclaycard homepage (one of three promos in rotation)


PNC Bank homepage (in lower left corner)


US Bank homepage (one of three promos in rotation)



1. The five other issuers mentioned at the Apple launch were: Barclays, Navy Federal Credit Union, PNC, US Bank, USAA. Yesterday, Arvest Bank announced it was supporting the system as well.
2. Despite having 10 card accounts (four business and six personal) across the six launch partners, I have received emails only from two (Wells Fargo on 11 & 19 Sep 2014 and Capital One on 12 Sep 2014).

Why (Most) Banks Need Not Worry About Apple Pay (Yet)

image I’ll admit to being caught up in the hype. The 48 hours after Tim Cook revealed Apple’s long-rumored foray into payments were some of the most exciting times in fintech since the 1995 to 1997 period when most of the online “firsts” happened (see note 1).

And we’re seeing more thoughtful fintech posts in the past week than we used to see in an entire year. Thanks especially to Tom Noyes, Cherian Abraham, Brian Roemmele, Celent’s Zilvinas Bareisis and finally today from Gonzo’s Steve Williams for helping me see beyond the hype.

I can add little that hasn’t already been said to the discussion about NFC, payment ecosystems, or the future of mobile payments. Clearly, it marks a turning point for mobile payments and improved U.S. security, and the play-out will be fun to watch.

The one area I haven’t seen covered: What does all this mean for the 10,000 U.S. banks and credit unions not on the 11-name list at launch (note 2)?

So here’s my take on the impact of Apple Pay on small- and medium-sized FIs over various time horizons: 

In the short term (2014): ZERO

In the medium term (2015-2016): ZERO

In the long run (2017+): Something, but impossible to quantify at this point
                                     (it could even be net positive)

Here’s why bank/CU execs (outside the top-20 credit-card issuers) should not lose sleep over what Apple is doing:

1. Apple Pay (in the physical world) can be used only at contactless terminals
Supposedly, there are 220,000 contactless terminals in the United States. But if you’ve ever tried to use one, you know that 200,000 of them are either not working or are buried behind beef jerky on the counter. This will change rapidly as merchants upgrade during the next few years.

2. It’s complicated to use (at first)
First, you need an iPhone 6, then you need to figure out how to use Apple’s Passbook program, log in to iTunes or take a picture of your card, successfully authorize it, enable TouchID and so on. Millions of early adopters will figure all that out, but then they won’t be able to find a working contactless terminal (see #1) and then they’ll forget all about it.

3. The number of your customers that care enough to move deposit accounts for NFC payments is near zero (for now)
Let’s do the math. Assume that a year from now there are 5 million Apple Pay active users (making at least one transaction per week) or 2.5% of U.S adults. If you have 20,000 customers, that means 500 will be active users of Apple Pay. Most will be happy to use their existing Capital One, Citi, and other rewards credit cards for the transactions. Very few will care that your debit card doesn’t work on the system. Let’s say it’s around 25%. That means you have something like 125 customers who are disappointed with your mobile payment capabilities. If they like you otherwise, how many will move their checking account to get an Apple Pay-enabled version? While the number is probably zero, let’s say it’s 5% to 10%. That means you could lose 6 to 12 customers. Using the 80/20 rule, only one or two of them are profitable. Will it hurt to lose two profitable customers? Sure, but it’s not going to be on your top-10 or top-25 list of worries.   

4. There are ways to mitigate any lost wallet share to Apple-Pay issuers
Even if my math in #3 is way off, or you are concerned that you will take a material hit to the bottom line, or you just want to be part of Apple Pay, easy routes will undoubtably be built to get your cards enabled into Apple Pay. Maybe not in 2014 (or even 2015), but certainly within the next couple years. And even if I’m wrong and you are locked out of the iPhone indefinitely, you can create an Apple Pay poaching program where your customers make their charges on a bigco bank card, then you automatically pay those charges off and essentially transfer them to your customer’s checking account.

So my final advice. If you have an employer (or spouse) that’s been reluctant to fund your iThings, now is the perfect time to do an upgrade (just don’t show them this post).


Chase homepage shown to existing customers (15 Sep 2014)
Note: All three links on bottom of page go to the iPhone6 “Apple Pay” features page at which leads with Chase (link)



1. Or perhaps 1999 when Paypal/ made P2P payments happen or even 2005/2006 when Zopa/Prosper/LendingClub launched consumer credit exchanges.
2. See Apple Pay launch event clip here, complete with transcript.

UX Lessons for Card Issuers from the New Starbucks Mobile App

image When I moved to Seattle, Starbucks had just four locations. So I’ve had a ring-side seat in their climb to worldwide ubiquity. Though not a huge fan of their coffee, I greatly admire their business model, technology, and payments innovations.

I have been paying with the Starbucks mobile app for the past few months (note 1) as have 14% of its customers. It’s great as long as there is a queue. That gives you plenty of time to go through the 9-step mobile payments process (10 steps with tipping):

1. Dig out your phone
2. Enter the smartphone passcode (if applicable) 
3. Locate the app
4. Open it
5. Press pay
6. View balance to ensure there is enough cash available
    (not applicable if auto reload is enabled)
7. Wait for cashier to press the correct key on terminal
8. Position your phone under the QR reader
9. Wait for cashier to give you the OK
10. (Optional) Dig in your wallet/purse/pocket for tip money

While this process seems ridiculously time-consuming compared to a card swipe (or cash), if you are waiting in a queue (typical), you can take care of all that before your turn to order (especially if you already have your phone out and are logged in).


The new Starbucks app

image The latest version of the Starbucks mobile app (iOS released 20 March 2014) cuts two steps from the 10-step process. More importantly, the crucial “hit pay” (step #5 above) has been replaced by a shake of the smartphone to signal it to display the Starbucks QR code needed at the point of sale. While not a huge timesaver, it pretty much eliminates navigation within the app before payment, quite an improvement in UX once you get the hang of it (note 2).

The new app also offers electronic tipping, a welcome improvement for the staff, since the move to no-signature card-transactions many years ago took away credit-card tips.  

The app integrates four components into the homescreen (see screenshot #1 right):

A. Top navigation with choice of:
— Pay: Opens up QR code (in lieu of shaking) (see screen #2 below)
— Stores: Starbucks store locator with map and list
— Gift: Opens to virtual gift-card function with integration to iPhone contacts (see screen #3)

B. Loyalty program: A screen-dominating donut shows exactly where you stand on the path to the next loyalty level.

C. Messages: Links to a “feed” of available offers (screen #4) including:
— discounts
— free iTunes song and app downloads (with integration to iTunes for easy redemption) (screen #5)

D. Account history (see screen #6)
— purchases and reloads 
— tipping function allowed for two hours after purchase (screen #7)



There are some lessons here for card issuers:

  • Focus: Go to on your desktop browser, and you’ll see about 150 navigation choices delivered via mega-menus across six main tabs. It’s worse than most bank websites. However, the mobile app has just three primary navigation choices (Pay | Stores | Gift), plus rewards, messages and transactions on the main screen. Starbucks rightly chose to concentrate on exactly what customers need when they are on the go. 
  • Integrate rewards/loyalty: Despite the “shake to pay” process improvement, the Starbucks mobile payment experience is still cumbersome and by no means easier than paying by card. However, because the app is integrated with rewards, all of sudden it becomes compelling, both for early adopters (certainly) and the mass market (note 3). 
  • Annotate the transaction: Besides the new tipping function, the transaction history includes both a feed of the transactions (screen #6), plus the ability to click through to a full receipt (screen #7). While not super interesting at Starbucks, when so-called “level 3” data is available for more complex purchases, it becomes an important part of the value delivered. 
  • Mobile first: If you offer information or services consumed on the go, mobile services (app & website) are the key interaction point going forward. Starbucks CEO Howard Schultz understands this (note 4). Does your CEO?



2. QR code (scanned at POS)             3. Virtual gift cards

image     image

4. Offer stream                                5. iTunes integration to redeem

image       image


6. Transaction history                &nb
sp;     7. Transaction detail with tipping

image        image


1. Previously, I was paying with Square Wallet since no reloading is required. But now I’m on the quest for Gold Status at Starbucks, so Square will have to take a backseat.    
2. Since users are not accustomed to shaking their phone to make it do something, it may take a while for everyone to figure out this shortcut. Luckily, the Pay button has been moved to a position of great prominence, for those that prefer to use the old navigation process.   
3. The Starbucks app is now on my wife’s iPhone. Besides the map, weather, Yelp, and French translations, it will be only the fifth app she uses frequently.
4. Starbucks CEO Howard Schultz is a genius and seems to genuinely care about his employees and the world. If he had only stayed out of pro sports ownership (go Sonics!), his record would be virtually untarnished.

New Y Combinator Fintech Grad, Coin Begins Pre-orders, Tech Press Goes Crazy

image It must be a slow news day. Two years ago, fintech barely got a mention in the mainstream tech press. Today, Coin, a stealthy "credit card 2.0" startup backed by Y Combinator and K9 Ventures, was covered almost immediately by 21 tech blogs (and counting). VentureBeat appears to have broke it first.

My favorite headline:

Master card? ‘Coin’ combines, debit, credit and others into one
–  by Devin Coldewey, NBC News

It’s currently the fourth highest ranked article on Techmeme and it’s the number 1 trending startup on Crunchbase today, beating Snapchat, which just turned down $3 billion from Facebook (bubble maybe?).


Anyway, for anyone who’s missed it, Coin is planning to release a programmable mag strip card along the same lines as Dynamics. Coin says its plastic card will hold up to eight distinct card details at a time, all accessible via a button and miniature LED screen on the card. The card syncs with your smartphone so you can swap out the eight cards anytime, for an unlimited number stored in the phone. It even beeps at you if you walk away from the Coin card.

image Coin announced a pre-order today. At 2:15 PM PST, the company said it had reached it’s pre-order goal in 40 minutes, selling more than 1,000 at its website today (cost = $50 + $5 shipping). That in itself is a sign of the times. An unknown startup (albeit with YC alum cred) crowdfunding on its own site and raiding $50k in less than an hour (see note 1).

For those concerned about the card’s potential use by credit card thieves, Coin requires the mag strip to be read via a Square-like dongle AND a photo of the front/back of the card which must match the mag stripe info AND your Coin profile.

The 2-minute video showing how Coin works has already been viewed more than 250,000 times. That has to be a single-day fintech record.

Video link

Bottom line: Some day, plastic cards will be relegated to the Smithsonian and the auction pages of eBay, but that day is many, many years in the future (see note 2). So the multi-card "plastic 2.0" concept from Dynamics, GoNowCard, Escardgot, Protean and others, could be a viable transitional technology. 

At $50 a pop (scheduled to double next summer to $100), Coin will clearly occupy a relatively small niche. However, if the price comes down to something closer to a burger and beer in NYC/SF ($15 to $20) or better, the startup uses a monthly freemium subscription model, it could take off.


1. I snagged one of them, so check back next summer for a report. 
2. For more info, see our recent Online Banking Report: Digital & Mobile Wallets(published Feb 2013, subscription).

Monday Fintech Four

image Editor’s note: This was supposed to be the Friday Fintech Four, which is much better alliteration. But alas, it didn’t get published, so here’s the belated Monday version.

<drum roll> Here are the four most surprising fintech developments of the past week (in no particular order):


One: Stealthy mobile payment startup Clinkle hires long-time CFO of Netflix, Barry McCarthy, as its COO

image McCarthy was CFO from 1999 to 2010, taking Netflix public in 2003, then overseeing its finances as a public company for seven years. It’s pretty unusual for a big-name public company exec to take on an exec role at a startup, especially one in mobile payments. And one that hasn’t even officially launched yet to boot. McCarthy is on the board of three startups: Chegg, Eventbrite and Wealthfront, a startup in the investment space.
    >> LinkedIn profile of McCarthy
    >> A nice overview of the news at TechCrunch 
    >> An interview with McCarthy at AllThings D


Two: New mobile PFM, Level Money, beats Square Cash to #1 in iOS app store (finance)

image As soon as Square launched its P2P payments app, Square Cash, it quickly rocketed to number two in the Finance section of the iPhone app store (see Chart 1 below) and number 55 across all free apps in all categories. But it never got higher, and a week later it’s hanging in at number 11.

The reason it missed the top slot? Another newcomer, Level Money, a great-looking new PFM, was being featured by Apple in the App Store and maintained the top ranking during that period (see Chart 2). During its time as a promoted app, Level Money maintained a top-20 ranking among all 500,000+ free apps (see Chart 3).

    >> Netbanker post on Square Cash
    >> Distimo app rankings for Square Cash (see following chart)


Chart 1: Square Cash app ranking in Free Finance in Apple App Store


Chart 2: Level Money app ranking in Free Finance in Apple App Store


Chart 3: Level Money ranking among all free apps in the Apple App Store



Three: Amex customers have put $1 billion into its Bluebird prepaid card

At this year’s SourceMedia Payments Forum, American Express revealed key metrics about its highly touted Bluebird prepaid program sold in Walmart stores:

  • 1 million new accounts
  • $1 billion in total loads
  • Average load of $1,000 per account
  • 87% of accounts new to Amex
  • 53% over age 35

Thanks to the attendees who tweeted the metrics @leimer (Bradly Leimer) and @JimMarous among others.



Four: Four fintech startups snapped up last week

Compared to other tech sectors, fintech has experienced less M&A activity in the past few years. Everything moves a little slower in a highly regulated, fraud-magnet segment. Buying fintech is not like bolting on a photosharing app. That said, it was a busy past 10 days on the M&A front:

  • Betterment buys ImpulseSave to boost its auto-savings features (Finovate post)
  • UK’s FundingCircle buys Endurance Lending to enter U.S. market (Techcrunch)
  • Blackhawk acquires Intelispend (Digital Transactions)
  • Wonga buys Germany’s BillPay to expand outside United Kingdom (Techcrunch)

Photo credit: Fab Festival