Pay by Phone

• By Ralph C. Jensen
• Jan 24, 2011

Starbucks is kicking off a mobile payment system, which means users of BlackBerry and Apple iOS platforms will be able to get their morning cup of joe with their cell phone. It seems pretty secure, as long as you have your cell phone in hand.

Here’s how it works. You download the Starbucks Card Mobile App and load money onto the app to enable payment via a Starbucks card. Order your cup of Java and then hold your smartphone in front of a countertop scanner. The device reads the on-screen barcode for the purchase, and in seconds, voila, you have your morning drink and Starbucks has its overpriced payment.

Last year, Starbucks loaded $1.5 billion onto Starbucks cards, reflecting a 21 percent increase from 2008. Mobile currency is a growing popular trend, allowing customers to replace cash and credit cards. By 2014, mobile payments are expected to reach as high as $633 billion, with nearly half a billion customers using their phones to make payments.

I applaud the payment industry for introducing this creative means to make payments. As long as it is secure and doesn’t put individual cell phone users at risk for theft, I think this is good technology. Several cell phone providers have launched a joint mobile commerce network, called Isis, and should be operational within the next 18 months. Visa, Bank of America, JPMorgan Chase and Wells Fargo also are working on smartphone payment technologies.