Starbucks is not just in the business of coffee and real estate — they are moving into mobile payments and are Apple Pay’s real competitor.
Earlier this week, Starbucks dropped Square for mobile payment in its stores, unwinding the partnership the companies announced in 2012.
Square had made Square Wallet obsolete in favor of its newer Square Order, but Starbucks declined to support either. According to a spokesperson for Starbucks:
Starbucks is not adopting Square Order in our stores. We opted to build our own mobile ordering solution, leveraging our own mobile app and world-class loyalty program.
Starbucks is currently testing that app in its Portland, Ore., stores. Moreover, Read Write reports that Starbucks CEO Howard Schultz, upon leaving Square’s board in October 2013:
He’s announced that mobile payments is a key business for Starbucks, and the company is considering offering its system to other retailers—putting it in competition with Square.
It also puts them in competition with Apple Pay. When Tim Cook announced Apple Pay, Starbucks was shown as a partner on one of his slides.
However, you can’t actually use Apple Pay at Starbucks — the partnership is only for loading Starbucks cards into iPhones, which is hardly substantial, and probably because Starbucks would prefer if customers pay with its own app.
It’s possible that Starbucks will eventually offer support for Apple Pay…but it’s also possible we’ll be paying for Apple products one day with a Starbucks app.
What we probably won’t be using in either place is Square.