Insight-Driven Retailing Blog

Starbucks recently released two iPhone applications. myStarbucks helps you locate the nearest store, design your coffee, and research nutritional information. Certainly useful, but nothing really unexpected. The second application, Starbucks Card Mobile, makes managing your prepaid Starbucks Card a little easier.

You basically sync your Starbucks Card to the iPhone app then you can check the balance, reload, and even pay for products in-store. When tendering, a barcode is displayed that the barista can scan for payment. (This application is only available in a limited test region.)

So I have to ask, does an iPhone application that simply mimics the functionality of a magstripe card really add much value beyond the physical card itself?

I downloaded CardStar, an iPhone app that stores multiple membership numbers. When at checkout, you select the right card and the iPhone displays a barcode to be scanned. The idea here is that all your cards can be stored electronically so you don't have to carry them around. I guess that's nice, but the little cards that go on your keychain are pretty easy as well, and they don't have batteries to keep charged.

Paypal has an iPhone app that sends electronic funds via email. I guess that useful if you're on the go and want to send money all over the place, but it doesn't help you in a retail store. And when I want to buy football tickets from a friend, I'd prefer to hand him cash from a nearby ATM.

Earlier in the week I saw a presentation by Mohammad Khan of ViVOtech, a leader in near-field communications. He explained how new cards and readers will enable customers to simply tap their card on the reader to tender a transaction. Is that really easier than swiping a magstripe card? (To be fair, the NFC technology has some other uses that are pretty cool, but that doesn't further this story.)

I thought PDAs were really cool when they hit the streets. I thought mobile phones were very useful when they found a small formfactor. But I never bought either until they were combined (thanks Blackberry), and I think I'm waiting for some sort of similar convergence before I really buy into these card alternatives. I spent a lot of time believing smart cards would change the world only to be disappointed (at least in the US), so perhaps I'm jaded in this regard. Nevertheless, I applaud Starbucks for making the first of which I hope are many advancements in this area.