As Starbucks moves to dominate the retail coffee market even further, they have unveiled a new payment method that will allow customers to conduct transactions without the use of cash or credit cards. Could this be the new wave of the future? If so, what implications could this have for the rest of the financial markets?
According to Starbucks, this process of using mobile 2-d technology to scan a payment method can be quicker, more convenient and reduce customer wait time. The technology works by allowing Starbucks users to add funds, track points or reload cards to a Paypal or credit card, which consumers can then use their phone to access their account and "touch to pay". This can be done while waiting in line and when the customer gets to the front, all they have to do is swipe their phone. Ingenious, isn't it?
With the unveiling of this new process in remote locations such as San Francisco and Seattle, exposure from these markets will allow the company to judge whether the demand is there to begin operations of this platform via their 6,800 other retail locations. These advancements in the area of mobile transactions can only be made however if you own a smartphone or any device that can download "apps".
If this venture is successful, it will cause an immediate impact in the demand for wireless communications technology and advances in telecommunications, where bandwidth is currently being capped due to over-usage. I suggest keeping an eye on transaction based companies such as PayPal or wireless communications development companies because this might be catalyst for extensive growth in the tech sector. The long term implications of mobile payments on the financial markets are uncertain, but the short term possibilities are clear. We are transcending into wallet-less, wireless world and bandwidth is the new black gold!
