Starbucks Gives Mobile Payments Industry a Jolt

Starbucks, one of the most iconic corporations in the U.S., has rolled out a mobile payments program that will enable customers to make purchases with their smartphones. Never mind that the same near-field communications (NFC) technology has already been in use in other parts of the world for several years, this will have a significant impact on the emerging mobile payments industry in the U.S.

The program will be available at every Starbucks location across the nation, and customers can download the free Starbucks Card Mobile App for use on select BlackBerry, iPhone and iPod devices. Users then will be able to pay for their purchases by holding the app's on-screen barcode in front of scanners placed in more than 7,500 U.S. stores.

The U.S. is much later to the mobile payments party than parts of Asia and Europe, where consumers routinely pay for things with their smartphones. But if any U.S. company can push something into the mainstream almost overnight, it's most likely Starbucks.

The question, then, is not whether mobile payments will finally catch on in the U.S. Instead, now that they are about to catch on - and most likely fairly quickly - the question is, what does it mean for the rest of the industry?

For dozens of startup companies that have been establishing themselves in the mobile payments space the past few years, the outlook is a little murky. The one probably known to most is Square, but there are many others including Zong, Venmo, Bling Nation and FaceCash that would suffer the consequences if mobile payments took off without them.

Other, much (MUCH) larger companies such as PayPal have been working extremely hard on capturing the mobile payments market in the U.S. The new Starbucks app has a PayPal integration, but that's not to say that will always be the case - with Starbucks or with the next giant U.S. corporation (Target or McDonald's, for instance) to roll out a mobile payments program.

Then there are the credit card companies and the banks, which have also been hard at work trying to shape any developments in the U.S. mobile payments market to fit their own objectives. Visa announced two separate pilot mobile payments programs last fall, one in partnership with Bank of America and the other one with Bancorp. And back in August, MasterCard announced the purchase of European payment service provider DataCash to better position itself in the event that the U.S. market gained any traction in 2011.

It appears that the U.S. mobile payments market is now about to gain some serious traction after several years of running in place. So whoever considers themselves serious players in the space had better be ready to play.