Thursday, January 3, 2013

Square Wallet at Starbucks Doesn't Work Very Well

Updated. Square’s wallet technology won a big endorsement when Starbucks decided to adopt it nationwide. In practice however using an ordinary credit card to pay for my daily cup of joe and pastry would be much quicker given the time I have to spend at the cash register teaching Starbucks’ staff how to use their own technology.

The Square Wallet is supposed to let a customer use their iPhone or Android smartphone to easily pay for their Starbucks purchase. After it’s downloaded from the app store the user inputs his or her credit card number into the app and Square stores it. Then when you enter a Starbucks location that accepts Square Wallet, the app geo-locates you using your phone’s GPS. After you select the store you’re in you can pay for your purchase by showing the QR code that appears on the phone’s screen. The check-out clerk scans your phone and you’re on your way – in theory.

In the two or so months since its debut I’ve tried using Square Wallet at a half dozen Starbucks in the New York City area. It hasn’t once worked like it’s supposed to.

First Starbucks barristas are often confused between the Square QR code they have to scan and the code generated for Starbucks’ own mobile app. I usually have to tell them that it’s Square that a want to use and then they have to step back and consult with their colleagues. One of these folks will remember that a separate button has to be pressed on the Starbucks cash register before Square can be accepted.

Then what I’ll call the “scanning dance” begins. Try as they might  barristas have never been able to scan Square’s QR image. Instead I have to slowly read out to them a 16 digit alpha numeric code that appears beneath the below the image. This error prone process causes everyone frustration.

People standing behind me in line glare since I’m standing between them and their coffee fix. The barristas aren’t happy because throwing them a curve ball that’s upending their happy task of mixing drinking. I’m of course fuming because everyone else is mad at me. It’s a circle of discontent. (Sometimes though it’s so busy that the barrista will give me my drink for free. This maybe an ironic incentive to use Square Wallet more often).

A spokeswoman for Square told me that the company is continuing to learn from its efforts and it's working closely with Starbucks to perfect the experience. Square hopes to introduce more features this year to make it even better.

One nice feature about the existing app is that once I make a purchase an itemized version of my receipt appears automatically and is stored with all my previous purchases. Besides saving a few trees, not having my pocket or wallet filled with crumpled bits of paper is a good thing.

Selecting a Starbucks location shows a QR Code that a barrista is supposed to scan, but often the scan doesn't work. I have to read out the alpha numeric number to the barista and sometimes I get a free drink because its too much of a bother. 

From the perspective of a consumer having a virtual wallet where the credit or debit card stored on my phone is a compelling proposition because it reduces the number of items I have to carry. Cash was replaced by plastic. Plastic may be replaced by a digital image (or radio waves travelling in the air in the case of NFC based technologies like Google Wallet). Payment for goods and services becomes frictionless.

However the promise of the virtual wallet will go unfulfilled unless there is mass adoption by merchants. Certainly Square and Starbucks are demonstrating the promise of things to come, but mobile payments will only be a brand associated novelty unless it becomes more widespread.

Given this, I wonder whether Square is rightly placed in the mobile payments eco-system for long term success? Does it become and acquisition target for another player or will it become roadkill as a result of a company that is better positioned. If Visa, Mastercard or American Express had mobile wallet services that would certainly make the service more available amongst merchants. Integration of Square Wallet at the device level by Apple (iOS) or Google (Android) would also make the technology more universal.

The Square Wallet has other features that Starbucks hasn’t rolled-out yet that make mobile payments unique. One service allows hands free payment by having the customers picture appear on the merchants’ check out screen. This way the consumer doesn’t even have to take their phone out of their pocket.

No doubt Square Wallet is innovative and its distribution with Starbucks gives it some heft in the marketplace,  but without nailing down the ability to consistently scan the QR code it’s a broken experience and creates more friction than it eliminates.

Update: Looks like this was fixed through a software update to the point of sales system. Starbucks reached out to me through Twitter after I posted this article for the addresses of the locations where I was having trouble. A couple of weeks later the location was able to scan. According to the manager he had to scan a new barcode into the system and in effect "teach" the system. Coverage is still spotty though because not all locations have received the code update.