Starbucks store goes completely cashless: Will more branches follow suit?

Starbucks tests cashless payment
A view of the new Starbucks Reserve Roastery and Tasting Room during its preview in conjunction with the company's biennial investor meeting in Seattle, Washington December 4, 2014 REUTERS/Jason Redmond

A Starbucks shop in Seattle, Washington has gone completely cashless in its transactions as part of the global coffee chain's test to scrap bills and coins in the long run. The tech-savvy company is only testing the waters at one location, but experts believe it is on the right track to go fully digital soon, regardless of the results of the pilot.

The Starbucks inside the Russell Investment Center along Second Avenue in downtown Seattle has started to refuse cash payments since Tuesday. The test is geared towards determining whether payments through credit and debit cards and phones will sit well with the customers.

Also read: Singapore's first cashless cafe allows you to pay in bitcoin

"The test will help us understand how cashless forms of payment may impact our customer experience," a Starbucks spokeswoman tells the Seattle Times.

Mornings at Starbucks can be turtle-slow at times; hence, digital payments are expected to make transactions faster and more efficient than cash. However, it remains unknown how long the test will last and if Starbucks has plans to try the same approach in other locations.

"The journey toward having a cashless society is not easy," says Zil Bareisis, a senior analyst at Celent in an interview with Payments Source. "Some countries are further ahead than others, but overall cash has proven to be a resilient payment method."

The company has seen more than a quarter of its transactions via its mobile app. Regardless of the fact that some consumers may have no credit or debit cards, Starbucks is in a good spot to go cashless according to analysts.

"The Starbucks case is interesting. It has built a loyalty app, meaning there was already an incentive to move away from cash," says Gareth Lodge, a senior analyst at Celent.

Still, digital payments have its own downsides. Currently, there are no signs that Starbucks will be officially moving forward with the cashless system anytime soon. But as analysts underscore, the path Starbucks takes is going that way.

This article was first published on January 20, 2018