It’s a very good sign of mass adoption when the world’s most recognisable coffee change and one of the biggest software and tech firms release that they are to partner together. It’s even better when it involves the use of Bitcoin. The major announcement is that the Starbucks is to team up with Microsoft and a “leading global exchange” to form a new digital platform to give Starbucks customers the opportunity to pay for their skinny mochas in cryptocurrencies.
How will it look and when? BCG, Microsoft and others with share expertise to form a company called “Bakkt” which will allow consumers the ability to spend and transact cryptocurrencies to buy normal, really consumer goods on the high street by November. The platform can convert cryptocurrencies to the US dollar and vice versa giving flexibility and choice.
This is a well-timed strategic move for Starbucks who have struggled in the last few years with expansion, strategy and PR disasters. They have not had good luck with moving into new jurisdictions such as China, margins have been squeezed due to currency fluctuations, cost of the product and higher competition. Regular tax avoidance from “tax efficiency” practises and the occasional negative service PR video never helps the brand.
Maria Smith, vice president of partnerships and payments for Starbucks, said in a statement:
“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks,” She continued, “As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”
This doesn’t detract from the core argument that Bitcoin is a currency. One of the main objections is that is isn’t a true currency because of its volatility in price. For example, yes you can buy your coffee in an edgy east London café but a) its equivalent to about £9 (instead of £3 fiat) but b) if and when Bitcoin goes up by 50%, the price of that coffee goes up by 50% in real, live terms. When Brexit happened and the pound went from 1.50 to 1.20, a coffee was still £3. The lack of predictability and stability ensures it keeps its sceptics.
We are big fans of looking for and commentated on potential and actual partnerships being formed between cryptocurrency and payments of everyday goods and services. We covered a “hot” topic on the Verge and porn partnership earlier. We will keep our eyes out for more in the coming weeks.
It’s a positive move for the industry and gives greater, larger commercial and regular institutional use but with the ability for people to integrate it into their day to day living. The more transaction and usage will lead to more purchasing and trading which will fuel another bull run no doubt.
“It’s very big news for Bitcoin because people say, ‘Where can you spend it?’ Now at every single Starbucks,” said Brian Kelly, founder and CEO of BKCM. “Starbucks is seeing some kind of demand for acceptance of crypto and bitcoin, and to tie up with a huge regulated institution like the ICE is really positive for the space.”
Despite the transition and the pioneering move, Starbucks and Microsoft are the first major retailers and tech company to incorporate cryptocurrency. The website overstock.com accepted the first transition back in 2014 and Shopify, CheapAir and Expedia have also had their services paid for via Bitcoin.