Visa Inc. is working with Starbucks Corp. in a promotion to improve Visa brand's status within a mobile wallet.
The San Francisco payments network is giving $5 to each customer who uses a Visa credit card to load at least $25 onto a prepaid Starbucks Card account using a smartphone, the Seattle coffee chain said. Starbucks' mobile payment application runs on Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry devices.
The Visa reload promotion, which began last month and runs through June, aims to "make it easy" for consumers to reload Starbucks Cards with Visa, a representative for the payments network said. The promotion is good for a one-time reload of only one Visa card.
This is "an easy way to gain visibility and consumer awareness," and it may herald the beginning of more such promotions, Beth Robertson, director of payments research at Javelin Strategy and Research, said. But most mobile payment promotions will be designed "as drivers of true mobile payment, rather than card reload," she said.
Brian Riley, a senior research director with TowerGroup, said that although the promotion could cover the cost of a grande-size beverage, "$5 will not build loyalty." Rather, it may be a bid to maintain the loyalty of customers Visa acquired through an earlier product, Riley said.
"This promotion shows that Visa is interested in holding on to its status as the primary payment choice for Starbucks Card customers, even though the cobranded Chase Visa card Starbucks used to offer has gone away," he said. A year ago, JPMorgan Chase & Co. phased out the cobranded Starbucks Duetto Visa card it introduced in 2003.
