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Starbucks leads in mobile proximity payments

Coffee shop app is surprise leader in mobile proximity payment apps, beating Apple, Google and Samsung

Starbucks leads in mobile proximity payments
Starbucks mobile app is the leading mobile proximity payment service in the US.

Starbucks is set to dominate proximity mobile payments in the same way it has dominated sales of coffee, according to market research company eMarketer.

The coffee chain has the leading proximity mobile payment app, beating Apple Pay, Google Pay and Samsung Pay, and is expected to keep its lead well into 2022.

Figures from eMarketer show that Starbucks payment app had 20.7 million users last year, and will attract around 23.4 million this year. In comparison, Apple will only reach 22 million users in 2018 while Google is predicted to have 11.1m and Samsung 9.9

The company expects Starbucks to have nearly 30 million users by 2022, while Apple will only manage 27.5m. eMarketer defines an active user as having made at least one proximity mobile payment in the past six months.

eMartketer said that while generic payment apps like those from Apple and Google are usable with more merchants, apps like Starbucks have a better value proposition to users, by making it easier to pay for drinks and by offering a reward program.

"The Starbucks app is one of the bigger success stories in mobile proximity payments," said eMarketer forecasting analyst Cindy Liu. "It has gained traction thanks to its ability to tie payments to its loyalty rewards program. For users of the app, the value of paying with their smartphone is clear and simple-you can save time and money at the register, all while racking up rewards and special offers."

Apple Pay has the second-highest adoption rate, having launched before the Google and Samsung apps, and is currently accepted at more than half of US merchants. Google Pay is not as widely accepted, but it benefits from being preinstalled on Android phones. While Samsung Pay has the lowest adoption in terms of users, it is the most widely accepted by merchants.

eMarketer expects competition to intensify between service providers, and new entrants will mean that the leading four will see their overall market share decline. The company expects there to be 55m users in the US this year, and for over one quarter of all smartphone users over the age of 14 to use proximity payments at least once.

"Retailers are increasingly creating their own payment apps, which allow them to capture valuable data about their users. They can also build in rewards and perks to boost customer loyalty," Liu said.

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