Mobile wallets are here! Customers can check out at various retailers using their mobile phones, including:

• Starbucks. Customers can download the Starbucks Card Mobile app to their phones, which links to their Starbucks card account. A cashier then reads the QR (quick response) code on the phone using a scanner, which deducts the cost of today’s triple caramel latte from a prepaid balance. In the first month it was offered, customers made more than 1 million mobile payments at Starbucks. They were well able to do so; Starbucks sold more than $1.5 billion of credit on Starbucks cards in 2010, a 21 percent increase from 2009.

• Target. The retailer’s mobile application allows users to upload gift cards they receive and then scan them from their phones.

For consumers, such gimmicks can be helpful; they do not have to worry about remembering their gift or account cards. All they need as they leave for the day is their phone—something they likely already carry every day.

For retailers, such mobile applications offer a bridge to online payments. Non-contact readers require expensive hardware installations at each register, but as more and more customers request them, retailers may have little choice but to invest in these technologies. The cycle is likely to continue, such that mobile payments will increase as more and more retailers accept this form of payment.

What added value does the Starbucks application offer customers?

Does the application offer added value to the retailer too?

Samantha Murphy, “Checkouts Go Digital,” Chain Store Age, April/May 2011.