Starbucks Has a Latte Things Brewing

Starbucks has something brewing and it is not coffee. Recent media reports allege that the Starbucks mobile application was hacked, but the brand is claiming otherwise. The issue arises seven months after Howard Schultz, the CEO of Starbucks, announced on an earning’s call that the company is an industry leader in mobile payments and ordering.

Customers can use the mobile application to pay for an order, to send gift cards or check their account balance and add funds. While there are other features, the four listed directly affect payment. There are risks when linking bank accounts to store cards, but roughly 1/6 of Starbucks’ customer base is participating.

“Already, close to 7 million transactions per week, 16 percent of all transactions conducted in U.S. Starbucks stores, occurs via a customers’ use of a mobile device,” said Schultz. “No company and no retail store, domestically or internationally, even come close.”  

The higher number of mobile users is beneficial to Starbucks, but can become an issue when hacks occur. However, there is the potential to lose the trust of 1/6 of a customer base.

Starbucks released a statement that disputed the media reports, but gave customers advice on how to protect their information such as creating strong passwords, changing account information after losing a device and remaining alert. It is important for consumers to safeguard their information, but ultimately, businesses have to be prepared to protect the data they store.

If large companies are at risk for hacks, this can discourage smaller and other larger companies from fully investing in mobile. It is important that companies focus on verification and authentication to avoid hacks like Starbucks.  

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