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Starbucks will begin accepting Apple Pay later this year and will start rolling out the payment option to all of its 7,500 company-owned stores in 2016.
Apple Pay VP Jennifer Bailey made the announcement at the Code/mobile conference in Half Moon Bay on Thursday.
It’s already possible for customers to add credit to their Starbucks app using Apple Pay, but users will soon be able to pay with a credit card stored in the Apple Wallet on an iPhone or Apple Watch.
Bailey also said that Best Buy turned on support for Apple Pay today. Best Buy was one of the first supporters of the competing MCX mobile payment.
KFC will also start supporting Apple Pay next spring.
Apple says it had 220,000 merchants on board with Apple Pay at the beginning of the year and expects to pass 1.5 million by the end of the year.
Apple Pay currently supports credit cards, debit cards, and rewards and store cards, and Bailey said that Apple may be open to supporting additional payment types on its platform in the future.
Samsung recently launched a mobile payment system that supports older magnetic strip technology, as a way of increasing the number of retailers and merchants users can pay with their phone.
Bailey politely dismissed that strategy: “Our view on mag stripe is that it is 50-year-old technology,” she said. “We wanted to build for the future and create technology that will last for the next 50 years.”
Big tech companies like Apple, Samsung, and Google have spent megabucks to launch NFC-based mobile payments systems, but consumer and retailer uptake has been modest.
Seventy-seven of the 100 largest merchants in the U.S. do not accept Apple Pay, said Karen Webster, mobile payments expert and CEO of Market Platform Dynamics. And as you move down the list toward smaller merchants it gets even harder to find those that support Apple Pay.
The reason is that consumers don’t see paying for things with a credit card as a big inconvenience, she explains. Webster said high numbers of mobile consumers her firm surveys simply forget that they can use mobile payments at some stores, so they don’t.
The company that’s been most successful with mobile payments in the U.S. is Starbucks. And the main reason so many people use their Starbucks app to pay, Webster says, is because they already have their smartphone out to use while standing in line.
When the consumer is asked to reach into a purse or pocket for a way to pay, they’re more likely to reach for a plastic card that they know will work, rather than a phone, Webster said.
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