Payments

Daily Review: Starbucks & Mastercard Are Taking Bold Steps to Redefine Payments Habits

MEDICIGlobal Head of Content

Businesses move towards cashless operations in various ways and at various speeds, but certain companies play a more defining role in transforming modern payment habits than others. Starbucks and Mastercard are among corporations taking bold steps to redefine payments and shopping experiences. While the strategies differ, both companies stay on course of taking cash out of the picture.

Pick #1. Starbucks Tests Cashless Store as More Customers Buy Coffee with Their Phones

The coffee giant is testing a cashless store to see how digital and credit card payments affect customer behavior and experience at one of its restaurants (Seattle).

“30% of our payments in the United States [are] done with a mobile phone,” CEO Kevin Johnson said. “Over 40% is done with phones and Star Value cards with rewards. In China, over 60% of our tenders come from mobile payments.”

Starbucks said it added 1.4 million Starbucks Rewards members in the US in the last quarter, raising its total number of members to 14.2 million.

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Pick #2. Israel Becomes the First Middle-East Country with Merchants Accepting Alipay to Welcome Chinese Tourists

The volume of Chinese arrivals to Israel increased 45% year-on-year in 2017. Last year, over 123,000 Chinese tourists visited Israel. The typical Chinese tourist visits Israel for an average period of nine days, during which each tourist spends approximately $300 daily.

Israel becomes the first country in the Middle East in which Alipay can be used for in-store payments. This follows Alipay’s extensive international expansion in recent years. The service is available for Chinese tourists and business travelers visiting Israel.

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Pick #3. Venmo Rolls Out Instant Transfers to Debit Cards for 25 Cents

Starting January 22d, 2018, Venmo users can transfer their Venmo balance to a bank account within minutes using an eligible Mastercard or Visa debit card. There’s a $0.25 flat fee for each transfer. Venmo will continue to offer its standard bank transfer method at no charge.

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Pick #4. Mastercard Supports Today’s Gig and Changing Workforce

Mastercard announced the Inclusive Futures Project, a new program committed to providing products and services specifically aimed at gig and next-gen workers. The Inclusive Futures Project will address challenges in three key areas: digital solutions to manage finances and speed payments; government services for greater innovation and efficiency; and smart cities for a digitally inclusive future.

Digital Solutions Commitment: Mastercard and Care.com, an online service for finding and managing family care, will make it easier for caregivers on Care.com to manage variable cash flows and personal finances by providing them with real-time payments for services rendered along with budget management tools.

Government Services Commitment: Mastercard and Square will join forces and engage, to start, with municipalities in New Orleans and Cleveland to create educational workshops to provide support to entrepreneurs and small-business owners, with a specific focus on financial literacy and access. By leaning into existing digital solutions and partnerships, the two companies will help local businesses expand with digital payments.

Smart Cities Commitment: Through a public-private sector program called City Possible, Mastercard will work with cities and corporate partners around the world co-developing, scaling, and commercializing solutions that help drive more inclusive and sustainable urban economies.

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Pick #5. Biometric Identification Must Be Made Available to All Mastercard Users by April 2019

All consumers will be able to identify themselves with biometrics such as fingerprints or facial recognition when they shop and pay with Mastercard by April next year. It means that banks issuing Mastercard-branded cards will have to be able to offer biometric authentication for remote transactions, alongside existing PIN and password verification. It will also apply to all contactless transactions made at terminals with a mobile device.

Mastercard Identity Check, now available in 37 countries around the world, is an authentication solution that enables individuals to use biometric identifiers, such as fingerprint, iris, and facial recognition to verify their identity using a mobile device during online shopping and banking activities. This solution dramatically speeds up the digital checkout time, improves security and reduces abandonment rates.

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Elena Mesropyan

MEDICIGlobal Head of Content

Global Head of Content, MEDICI

Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.