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When it Comes to Mobile Payments, an Omnichannel Strategy is Best

When it Comes to Mobile Payments, an Omnichannel Strategy is Best

It’s been four years since Apple launched Apple Pay, which together with Google Pay and Samsung Pay have ushered in the modern era of mobile payments. These “pays” have been joined by mobile payment solutions from retailers like Starbucks and Walmart, and together with P2P apps that can be used at the point of sale like Venmo and Square’s Cash App, mobile payments in 2018 are increasing market share.

With merchant acceptance of EMV chip cards now at about 2/3 of retail locations and growing quickly, card networks and issuers are focused on increasing contactless card issuance and merchant acceptance of contactless transactions.  ETA projects that tens of millions of contactless cards will be in the U.S. market this year, and that number will increase significantly in 2019.  And merchants should encourage their customers to try contactless because of the immediate benefits:  faster check-out times, more secure transactions, and more connections to data-driven offerings.

For merchants to reap the full benefits of the modern mobile payments ecosystem, their payments strategy can go beyond accepting a contactless tap-and-go card and encourage use of smartphone payments at the point-of-sale. The true value of mobile payments comes from the marketing value of an omnichannel approach.  Take mobile order-ahead as an example. Six in ten American consumers between 25-34 years of age have used a restaurant or coffee shop mobile order-ahead service, and two in three Americans report choosing a restaurant specifically because it offers order-ahead. These services are growing quickly, and merchants that accept order-ahead mobile payments can engage new customers searching for dining options via their smartphones.

Mobile payments also offer a great opportunity for merchants to boost loyalty programs and discounts. Ninety percent of American consumers participate in rewards programs, and through easy integrations consumers can stack up rewards and discounts directly in their payment apps. Look no further than the success of Starbucks, Walmart and Walgreens with rewards programs and coupons built into their mobile apps and OEM mobile wallets. Mobile rewards programs are a proven marketing tool, and payments service providers are investing billions into making them easy and accessible for merchants of all sizes.

Ultimately, consumers care most about two things: saving time and saving money. A mobile payments strategy that embraces omnichannel acceptance – capturing customers whether they are order-ahead lovers, rewards program loyalists, or mobile wallet lovers – gives merchants tech-forward tools to tap into a growing market. Ultimately, it will be critical for merchants to build their presence in an increasingly digital marketplace.



Jason Oxman is CEO of the Electronic Transactions Association – the global trade association now represents more than 500 financial and technology companies, making commerce possible by processing more than $6 trillion in purchases in the U.S. For more information about payment trends or the payments industry, visit

Starbucks, Juan Valdez in Friendly “Coffee Clash’

Los Angeles, CA – International coffee purveyors, US-based Starbucks and Colombia’s Juan Valdez, have both announced major expansion plans…in each other’s own front yard.

Starbucks has opened the doors at its first operation in Bogota, Colombia – the South American country synonymous with coffee, while Juan Valdez has countered with a new coffeehouse in Miami, Florida.

The new Bogota Starbucks is a three-floor, 2,700-square foot operation, the first of a planned chain of 50 the company plans to open throughout the country over the next five years. It will also be the only Starbucks in the world to serve exclusively only locally-sourced coffee.

Starbucks’ stores in Colombia will be operated as a joint venture with two of the company’s regional Latin American business partners, Alsea and Colcafe, a subsidiary of Grupo Nutresa, Colombia’s largest food company.

Alsea currently operates more than 520 Starbucks in Mexico, Argentina and Chile, while Colcafe worked with Starbucks to develop ‘soluble coffee’ product.

The company has heavily invested in Colombia, which serves as its primary source of arabica coffee, a mainstay of its menu.

In 2012, Starbucks opened a Farmer Support Center in Manizales, Colombia to deliver training and agronomy support to Colombian coffee farmers.

Last summer, Starbucks announced a public-private partnership with the US Agency for International Development that is investing $3 million to increase Colombian coffee yields and to enhance economic opportunities for Colombian coffee growers, according to the company’s website.

Not to be outdone, Colombia’s own Juan Valdez, the coffee brand backed by the Colombian Coffee Growers Federation (Procafecol), is expanding its footprint in Starbuck’s home turf with the opening of a new coffee house in downtown Miami, Florida.

Procafecol, which represents more than 500,000 Colombian coffee-growing families, said it will work with an unnamed Florida franchisor to open four more stores in Miami by the end of this year with an additional 60 sited throughout the state over the next five years.

The new Florida operation isn’t the Colombian company’s first attempt to build a retail chain in the US. It currently operates seven stores in New York, Washington and the Miami International Airport.

The moves by both companies underscores the nature of the ongoing competition for an upscale market that in the US alone generates $18 billion in business annually.

But, whatever the competitive dynamics of the so-called ‘coffee clash’, Juan Valdez will have a long way to go to match the clout of rival Starbucks in Florida and elsewhere.

Customer Loyalty

With 200 stores in Colombia alone, Juan Valdez has garnered a vast reservoir of customer loyalty, both in its home country and regionally.

It is heavily invested in developing Colombia’s country’s coffee industry, a bulwark of the country’s economy. Since its founding in 2003, the coffee chain has funneled more than $20 million to a national fund that supports the country’s 560,000 coffee-growing families, some of whom also own shares in the company.

Most of its 450-plus current cafes are in Latin American countries, though they span as far as South Korea and Kuwait.

There are, however, more than 400 Starbucks in Florida alone, and, while, Procafecol’s total sales are expected to reach $85 million this year, up from $74 million in 2013 and $67 million the previous year, Starbucks is projecting 2014 sales of $16.5 billion, according to reports released by both companies.

There are more than 20,500 Starbucks locations in 65 countries. In 2002, Starbucks opened its first location in Mexico. Since then, the chain has expanded into Latin America with more than 700 stores in 12 countries including Peru, Brazil, Argentina, Costa Rica, and soon, Bolivia and Panama.

Despite the David and Goliath caste to the parallel developments, Procafecol is, at least outwardly, welcoming the competition with the group’s Director of International Sales, Alejandra Londono, was quoted as saying, “There’s room in the market for us both.”













Apple, Starbucks Targeted by EU Tax Authorities

Los Angeles, CA – European Commission (EC) competition regulators are investigating tax breaks for Apple Inc. and Starbucks Corp. in Ireland and The Netherlands, respectively, that it suspects are in violation of European Union tax codes.

The investigation comes as governments around the world are cracking down on tax-avoidance and evasion by scrutinizing the financial practices of a growing number of multi-national companies such as Hewlett-Packard, Google, Microsoft, McDonalds, and

According to the EC, tax avoidance and evasion by foreign companies operating in the EU amounts to more than $1.4 trillion a year.

The EC reportedly began gathering information about accords between Apple and Ireland, and Starbucks and the Netherlands last year following reports that some companies received “significant” tax reductions.

“We need to fight against aggressive tax planning,” said Joaquin Almunia, the EU’s competition commissioner at a recent press conference in Brussels, adding that it is “still too soon to anticipate” possible recovery if the EU finds the tax rulings to be illegal.”

Apple Responds

While Starbuck’s didn’t respond to requests for a statement on the EC investigation, California-based Apple issued a response saying that the company “pays every euro of every tax that we owe. We have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”

Ireland’s Finance Ministry said it is “confident that there is no state-aid-rule breach” and will “defend all aspects vigorously.”

The EC said that it is “concerned that current arrangements could underestimate the taxable profit and grant an advantage to the respective companies by allowing them to pay less tax.”

Apple, the company said in a public statement, “pays every euro of every tax that we owe. We have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”

Ireland’s Finance Ministry said it is “confident that there is no state-aid-rule breach” and will “defend all aspects vigorously.” The EU probe targets “a very technical tax issue in a specific case” and covers 2004 to 2014, it said in an e-mailed statement.

 “Patent Boxes” Under the Microscope

Widening the scope of its investigation, the EC is also seeking details from Belgium, Spain, France, Hungary, Luxembourg, The Netherlands, the UK, Cyprus and Malta on so-called “patent boxes,”  a mechanism that allows tax reductions on income derived from patents.

The EC said in March it has indications that the programs mainly benefit highly mobile businesses without triggering significant additional research and development.

The UK, for example, patent box phases in a lower corporation tax on some profits from patented inventions and certain other innovations, according to the EC website.

Changes to EU tax rules require unanimous approval among the bloc’s 28-member nations,  rendering major changes to individual county’s tax regulations difficult, if not impossible as even the most enthusiastic members of the bloc cling to their right to set corporate tax rates.

The opening of an in-depth investigation by the commission allows third parties, as well as the three countries concerned, an opportunity to submit comments.