The internet is on a bit of a caffeine-buzz over Starbucks’ January 19th announcement that it had rolled out a mobile payment system for all of its U.S. company-operated stores. The system, which Starbucks touts as “the largest mobile payment program in the U.S. and the fastest way to pay at Starbucks” allows Starbucks’ loyals pay with the swoop of an smartphone. The Starbucks Card Mobile App for select BlackBerry® smartphones, iPhone® and iPod® touch (I, along with 46.7% of Smartphone users must wait for the Android app to try it out myself). Undoubtedly, the App has the potential to further increase loyalty amongst Starbucks loyals who long ago figured out that they could enjoy free refills ALL day by purchasing their regular coffee with a Starbucks Card- 1 in 5 of all purchases are made with the card). However, beyond boosting Starbucks’ bottom line (and hopefully busting the line for a latté) the mobile payment system has greater implications for what could be the future “flow of compensation” in the U.S. (A question posed by A. Miyazaki here).
Paying for goods and services by mobile phone through Starbucks new payment system may a be shiny new trick for Americans but its old hat for mobile phone users across Kenya, Afghanistan, Singapore, Malaysia, South Africa, Finland, the UK, and now Haiti (among a host of other developed and developing nations). Mobile Money (m-money), has been used for nearly 10 years often taking the form of mobile payments (m-payment), mobile commerce (m-commerce), and most recently even mobile banking (m-banking) around the world. In fact, globally, mobile payments were estimated to be $69 billion in 2009 and analysts project growth to continue. The most successful m-money case is that of M-Pesa (A service of telecom provider Safaricom, the m means mobile and pesa is the Kenyan word for money), a service that boasts nearly 9 million subscribers in Kenya alone, with over 2 million daily transactions (half of all daily transactions, according to a recent MIT research report). M-Pesa has expanded their service to Afghanistan, South Africa and is planning on rolling it out elsewhere in the near term.
More than a month before Starbucks’ announcement, Nicholas Kristof of the New York Times, wrote “cash is so 20th century”. This came following a visit to Haiti where he successfully purchased food from a small grocery with no electricity via cell phone (using a SMS text message banking service provided by Voila-Comcel). Kristof pronounced, “I’ve Seen the Future (in Haiti)”. (Bill Gates, Hillary Clinton, and Jeff Sachs have all endorsed Mobile Money as the future as well).
Is mobile payment the future? Certainly m-money takes different forms in Haiti and the United States. For consumers in developing countries, the move towards a mobile wallet signifies increased convenience, perhaps savings via customer loyalty, and the joy of not having to sift through hundreds of store-cards to find your Starbucks card. However, in developing nations like Haiti, Nigeria, Kenya, Fiji, and the Philippines, the shift towards mobile money could actually boost economies, improve the livelihoods of ordinary citizens, and even give the countries a boost up towards the next rung on the “development” ladder. This may seem like a wild claim, but for the 1 billion people in the world who don't have a bank account (let alone a visa or mastercard), but do have a cell phone, m-money creates opportunity for greater financial inclusion. Beyond easing the hassle and reducing the transfer costs of small person to person and person to vendor transactions, m-money can be expanded to offer savings, loans, insurance and a host of other financial solutions where there was none. And if advancing global economic welfare doesn't do it for your- with a potential market of 1-3 billion consumers, mobile operators could earn nearly 8 billion in revenue by 2012 offering sms mobile banking services to the currently unbanked.
I have much more to say on this topic-stay tuned…..
www.starbucks.com
http://e-marketingforsensiblefolk.blogspot.com/2011/01/pay-by-smartphone-at-starbucks-mobile.html
http://www.nytimes.com/2010/12/05/opinion/05kristof.html?_r=1&ref=nicholasdkristof
http://www.cgap.org/p/site/c/template.rc/1.26.10806/
http://e-marketingforsensiblefolk.blogspot.com/2011/01/pay-by-smartphone-at-starbucks-mobile.html
http://news.starbucks.com/article_display.cfm?article_id=490
Sunday, January 23, 2011
Sunday, January 9, 2011
Ahoy Mate, Pirating in 2011
Earlier today, while eating at our favorite Guatemalan restaurant in Miami, our table was approached by a young man binder full of peliculas (movies), all of which are still playing in the theaters. After flipping through the binder that featured blockbusters like Black Swan, The Tourist, and Harry Potter VII, my companion told the vendor, “Gracias, I have all of these already. I bought them in Colombia over the holidays. But, do you have any CD’s?“ And, out came the second binder… This exchange is extremely commonplace in Miami, and probably most major cities across the world. It’s just as easy to acquire a bootleg version of Rosetta Stone or Microsoft Office as it is to download the latest episode of Gossip Girl or Rhianna’s latest record. Professor Anthony Miyazaki of E-Marketing for Sensible Folk published a blog post on online music piracy earlier this week stating that piracy, “in the really old days, happened at flea markets and with shady street vendors”. While Napster, Kazaa, LimeWire, BitTorrent, and even YouTube bolstered online piracy, my lunchtime experience is proof that piracy continues to take many forms. As Mizyaki states, there are new efforts in the UK, US, France, and across Europe to combat online piracy, however, can these efforts succeed? Even if they do succeed in curtailing file-sharing and other forms of online piracy in developed countries, there is little to be done about the street vendors selling bootleg DVDs around the world. Further thoughts on the role of all things pirata and marketing Socially: The only complete albums I purchased off of iTunes last year were Artists for Haiti, Hope for Haiti Now and other similar albums to support the relief efforts in Haiti. I wasn’t alone. According to The Independent, Hope for Haiti Now which featured Rhianna, Wyclef, Justin Bieber, Alicia Keys, John Legend, Dave Matthews and Taylor Swift topped iTunes Charts. Profits benefited Oxfam America, Partners in Health, Red Cross, UNICEF, World Food Programme, Yele Haiti Foundation and Clinton-Bush Haiti Foundation. Of course I, and everyone else who purchased the album, could have easily listened to all these songs for free, however, I would have felt guilty (I normally would not have) since in my mind, I would be essentially robbing Haiti of much needed funds. Likewise, I also purchased the haunting Eminem/Rhianna video for "Love the Way You Lie" when I read that star Megan Fox’s paycheck went directly to a women's shelter. If more artists and recording companies donated a stated portion of proceeds to causes, would more people be inclined to purchase properly? Perhaps this would eliminate the tendency for consumers to justify downloading and purchasing entertainment illegally by saying that they are only costing the entertainers, movie stars, and theatres a little bit of money that they don’t need anyway. Perhaps one path to combatting piracy is artwork is to market it for a cause. Think about the success of VH1’s Save the Music Campaign that has provided more than $47 million in new musical instruments to 1,750 public schools in more than 100 cities around the country, impacting the lives of over 1.6 million children. What if someone like Bono (a prominent voice for the global poor and, also, against music piracy) promised a portion of music royalties to charity? Would people care?
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