Apple VP of Apple Pay Jennifer Bailey announced at the Code/Mobile conference on Thursday that direct Apple Pay payments would begin to be supported
at Starbucks and other restaurant chains such as KFC and Chili's in pilot programs beginning later this year, with a full rollout for all 7,500 of Starbucks' company-owned stores happening across 2016. The coffee chain, which has supported online Apple Pay for reloading its virtual loyalty card app but not direct payment, will now be able to take Apple Pay without a loyalty card or app if desired.
While sandwich chain Panera Bread has been accepting Apple Pay for a year, and McDonald's was also quick to climb on board at select locations, restaurants have generally been slow to adopt mobile payment technology. In part this is due to a low percentage of Point of Sale (POS) terminals in the US that accept "contactless" or NFC-based credit or debit cards, but that is slowly changing as many sales terminals must be upgraded soon to handle new "chip and PIN" EMV cards now being issued by banks and other financial institutions.
MacNN Editor Charles Martin, who splits his time between Canada and the US, uses his US-based bank card and Apple Watch to directly pay for Starbucks purchases in Canada right now. Like many first-world countries outside the US, contactless and EMV cards have been supported for years, making unofficial support for Apple Pay widely available for those with US-based cards. Currently, Apple Pay is only officially supported in the US and the UK, but other countries, such as Canada, are expected to announce official bank support before the year is out.
Bailey told interviewer Ina Fried that in addition to new businesses upgrading to support Apple Pay, the company was expanding support for loyalty cards and programs that can be loaded into Wallet (formerly Passbook) under iOS 9. Companies that already support Apple Pay such as Coca Cola vending machines, Walgreens, Kohl's, Panera Bread, and Whole Foods will soon be able to have loyalty cards or programs added by users into Wallet so that Apple Pay transactions count towards rewards.
Within the US, Starbucks has been using an app that could be reloaded with online Apple Pay, and would replicate a physical card with a barcode cashiers could scan to pay for purchases. The virtual Starbucks card was also able to be loaded directly into Wallet, making it possible to use the barcode with Apple Watch, but the scanning process was still awkward compared to Apple Pay and similar mobile payment technologies. The app or loyalty card now accounts for nearly one in every five Starbucks transactions in the US, and is one of the most successful such programs in the country.
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