Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Starbucks is the most Popular Payment App in America

Starbucks (NASDAQ: SBUX) not Apple Pay, Google Pay, or Walmart Pay is the most popular payment app in America.

The Starbucks mobile app had 23.4 million regular users, eMarketer estimated. Apple Pay was number two with 22 million accounts, Google Pay (formerly Android Pay) was  a distant third with 11.1 million accounts, and Samsung Pay fourth with 9.9 million utilizers.

This and earlier estimates that Walmart Pay is the fastest growing payment app in the United States demonstrate the problems that Apple (NASDAQ: AAPL) and Alphabet (NASDAQ: GOOG) face in payment. Starbucks can win its customers with coffee, the problem is that those customers do not think of using the app anywhere else.

These numbers should convince retailers like Kroger (NYSE: KR), Walgreens (NASDAQ: WBA), Safeway, Home Depot (NYSE: HD), and McDonald’s (NYSE: MCD) to launch their own payment apps. A smart move would be for Kroger to launch a payment app that allows customers to accumulate rewards points towards discounts on gas and groceries. Amazon (NASDAQ: AMZN) is experimenting with rewards points at its Whole Foods supermarkets.

There are 55 Million Mobile Payment users in America

Mobile payment use in the United States is a growing at a rate of 14.5% a year and it should reach 55 million by the end of 2018, eMarketer estimated. Around 25% or in four American smartphone users will make a mobile payment sometime this year.

Those numbers are big but they are nothing compared to China where Ant Financial’s Alipay has 520 million users, and Tencent Holdings’ WeChat has one billion active users, Bloomberg reported. Those people spent $2.9 trillion in the two ecosystems in 2016.

How Payment Apps can keep the Monster Banks from Ripping Off Average Americans

Such systems threaten banks because they pay no transaction fees to them, Bloomberg reported. Bloomberg estimates that American merchants might save $43 billion in fees lost to third parties because of America’s obsolete payment system. That’s another reason for the Federal Reserve to build a new payment system for America.

That system helped Bank of America (NYSE: BAC) generate $412 million in overdraft and Wells Fargo (NYSE: WFC) make $410 million in overdraft fees a year, Bloomberg estimated. Bank of America also made $282 million in maintenance fees because of that system.

Chinese banks lost around $242.9 billion in deposits to Alipay alone in 2017, Bloomberg estimated. American banks would have lost $188.3 billion in fees to Alipay if it operated on the same level in America.

This indicates that we will see an effort by US banks to throttle payment apps in the near future. It might explain why the Federal Reserve, which is run by the banks for the banks, has not followed the lead of the Reserve Bank of India and gone into the payment app development business.

The National Payments Corporation of India (NPCI) is working with Alphabet (NASDAQ: GOOGL) to develop a payment app called Google Tez. The NPCI is the umbrella organization for retail payments in India, it was set up by the Reserve Bank of India.

Passengers enter the Metrolink 383 express train from Covina station on early Wednesday morning, March 4, 2014. Metro and Metrolink are working on a plan to add 4 miles of double track in La Verne and San Dimas to run an additional San Bernardino to LA express train, the busiest of all the lines in Southern California. (Photo by Watchara Phomicinda/ San Gabriel Valley Tribune)

Apple Pay on the LA Metrolink

The Metrolink the organization that operates the popular commuter trains in Los Angeles, Orange, Riverside, San Bernardino, and Ventura counties will start accepting Apple Pay payments.

Metrolink riders will be able to use Apple Pay to buy tickets through the transit agency’s app, a press release indicates. It is easy to see why Apple is trying to sign up transit agencies, they have vast numbers of users.

“Currently, more than 40 percent of our riders are using the Metrolink mobile app to buy their tickets, benefitting from convenience and time savings,” said Metrolink Chair Andrew Kotyuk. “As part of our focus on customer service, we are adding Apple Pay so riders have even more choices.”

Metrolink operated 171 trains a week that served 39,074 riders in 1st Quarter 2017-2018, a fact sheet indicates. The Metrolink app was built by a company called Masabi and uses the Justride Mobility Platform.

Justride offers a GPS train tracker and Scan & Go which enables Metrolink riders to pay for rides on subway and light-rail trains in Los Angeles. That sounds as if the Justride will use Quick Read (QR) code technology to communicate with ticket machines. Apple Pay uses near-field communications (NFC) wireless signals to communicate with cash registers.

Airbnb Check in at Japanese Convenience Stores

Visitors to Japan can pick up keys for Airbnb units at convenience stores in Japan.

Airbnb renters will be able to check in at Family Mart convenience stores beginning in June, CNET reported. Airbnb guests will type their information into a tablet; then pick up their keys at stores in Tokyo and Osaka. When they leave the guests will drop the keys off at the store.

The service will be expanded to other Japanese convenience stores including Lawson and 7-Eleven in the near future. It is not known if Airbnb will offer key pickup at retailers in other countries such as the United States.

The security and retrieval of keys is a major headache for Airbnb hosts. Many of them end up paying to replace locks because guests never return keys. That often necessitates the use of factoring services like Payfully to cover the cost of locksmiths or a trip to the hardware store.

Partnerships with retailers like Kroger or Walgreen might solve that problem for Airbnb hosts in the United States.


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