Commerce Weekly: Starbucks gives Square’s mobile payment a big push

Square and Starbucks unite, same-day delivery from eBay and checking in on the mobile wallet wars.

Here are a few stories that caught my attention in the commerce space this week.

Square gets Starbucks, cash and Howard Schultz

SquareSquare announced a new partnership with Starbucks this week. Peter Ha at TechCrunch reports:

“Beginning this fall, Square will begin processing all U.S. credit and debit card transactions at participating Starbucks stores across their 7,000 locations. Pay with Square users will be able to find a nearby Starbucks in the Square Directory from their iPhone or Android smartphone.”

Ha notes in his post that as part of the partnership, Starbucks also is ponying up $25 million in series D funding for Square and offering up its CEO, Howard Schultz, to serve on Square’s board of directors.

Harry McCracken points out in a post at Time Techland the partnership will put Square in a much better position to compete on the mobile payment front. McCracken writes:

“At the moment, Pay with Square is accepted at around 40,000 locations — mostly neighborhood businesses such as independent coffee shops, restaurants and beauty salons. The agreement with Starbucks will put it in a major nationwide chain for the first time, and therefore puts it in closer competition with Google Wallet, which is already accepted at Home Depot, Office Depot, Starbucks rival Peet’s, Macy’s, RadioShack, 7-Eleven and other major merchants.”

Another important aspect of the agreement is that Starbucks will promote other local Pay with Square merchants “from within a variety of Starbucks digital platforms, including the Starbucks Digital Network and eventually the Starbucks mobile payment application.” As Ha notes in his post, “this catapults Square into the mainstream consciousness for the millions of drones who drop by their local Starbucks on the way to work.”

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And the winner is …

There’s a lot at stake in the race to control the blossoming mobile commerce market. A new report from ABI research predicts that by the end of 2017, 24.4% of online revenue will come from mobile commerce. And given that the mobile device market is just starting to boom, that percentage is likely to increase.

Consumer goods analyst Austin Smith interviewed with Isaac Pino at The Motley Fool this week and declared eBay, Amazon and Google early winners of mobile commerce race.

Smith highlights several reasons for his choices. EBay, he notes, sells 8,000 cars per week on eBay Mobile, and he also points out that eBay’s PayPal division is expected to handle $10 billion in transactions next year. As for Amazon, Smith says the company recently saw mobile sales top $1 billion and pointed to its ever-growing ecosystem of tablets and a possible transition toward a phone. And for Google, Smith reasons that “there are very few companies out there that have as powerful data analytics as Google … virtually no company has better data about how you shop.”

Keeping itself in the winner’s circle for now, eBay announced this week that the eBay Now mobile app will allow shoppers to order products from local retailers, with same-day delivery (a service Amazon has also been rumored to be pursuing). According to a report at Reuters, eBay is testing the app with a number of retailers, including Target, Best Buy, Macy’s and Walgreens, in the San Francisco market. The report describes the consumer experience:

“Shoppers involved in the test can download the app onto mobile devices such as Apple’s iPhone and iPad, then search for products to buy from local stores in San Francisco. When they find a product, users press a ‘Bring It’ button and the order is sent to couriers. The courier closest to the product accepts the order, drives to the store to pick up the product and then delivers it to the shopper’s home. Customers pay when the product arrives.”

According to the report, the first three deliveries are free, and “after that, delivery is $5 for the test period, and the minimum order is $25.”

The secret to winning the mobile wallet race

Forrester Research senior analyst Denee Carrington has a new report out this week on the mobile wallet wars. In a post at Forbes, Carrington shares a few takeaways from her research, including the secret to winning the mobile wallet race:

“Winning wallets will be convenient to use, contextually relevant, with a compelling experience. Moving the needle on the adoption of digital wallets — particularly for mobile digital wallets — will require infusion of significant value throughout the purchase journey before, during, and after payment. Winning solutions will bring this to life through greater convenience, contextual relevance, and a compelling purchase experience.”

Carrington also takes a look at the market dynamics and competitive nature of the mobile wallet landscape, and argues that NFC wallets may not reign victorious in the end. Hardware-agnostic wallets face fewer hurdles and thus will enjoy faster adoption. You can read more of Carrington’s insights here and find her full report here.

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