Published: April 5th, 2021
The conversation about Bitcoin seems to be going on unabated between both fans and skeptics alike. While a few big shots are still castigating crypto, prominent businesses are trickling into the fray. The newest entrant to the conversation is Starbucks. The multinational coffeehouse chain recently announced that it would accept Bitcoin and other cryptocurrencies as a form of payment.
Customers of the coffeehouse chain, Starbucks, can now apply cryptocurrency and frequent flier miles on their Starbucks app and use the same to pay for their purchases across all locations in the U.S. The announcement was made on Thursday, April 1, following successful testing of the app in some of the coffeehouse’s sites in the U.S.
The Starbucks payment app supporting the transactions is part of Bakkt (pronounced as Backed), a leading digital asset platform owned by Intercontinental Exchange, the same company that owns the New York Stock Exchange (NYSE). In an announcement, Bakkt said that Starbucks customers can now use a variety of means to recharge the in-store card. According to the announcement, the methods are gift cards, frequent flyer miles, and Bitcoin.
The coffeehouse chain does not accept crypto directly, however, through Bakkt, its customers can convert crypto alongside other supported rewards, loyalty points, and frequent flyer miles and use the proceeds on their Starbucks cards, the announcement said.
According to Jeanette Settembre, a staffer at Fox News, the deal in layman’s language, means that the coffee giant has teamed up with Bakkt, which would now convert users’ cryptocurrency into U.S. dollars so they can load the value into their Starbucks cards.
Jeanette says the venture is a tall order. However, she admits that it arguably is one of the ways to make Bitcoin payments and purchases more accessible.
Karl Hebert, the coffeehouse chain’s VP of global card, commerce, and payment, said his team worked closely with Bakkt when the digital payment platform was developing a unique and trusted transaction experience. The input that Bakkt got from the Starbucks team allowed it to come up with a payment experience that allows individuals to unlock the value of their crypto holdings, conveniently convert them into U.S. dollars and spend them, he added.
Hebert said the Starbucks management is excited that users can now use Bakkt to load their Starbucks cards and use the same to pay for coffee in any of the chain’s thousands of locations.
The new deal strengthens what has been a slow but steady acceptance of Bitcoin as a mainstream payment option. Bakkt said the app saw more than 500,000 users take part in the trial program alone. Though the giant coffeehouse chain’s deal is the first partnership the digital payment platform has had during the new digital wallet rollout, the company is negotiating more cooperation arrangements.
Among the national outfits that Bakkt is said to be pursuing include GolfNow, Best Buys, Choice Hotels, and Fiserv, an American multinational financial services company. According to the platform’s developers, any of these deals could fall in place at any time now.
Bakkt’s new arrangement with Starbucks comes even as the conversation regarding Bitcoins volatility rages on. The well-publicized aspect of the virtual currency has earned it many critics, including Warren Buffet. The legendary investor once termed Bitcoin as risky and worthless.
However, such warnings have done little to dissuade an increasing number of companies from accepting the coin as an official option of payment. In February, Tesla CEO, Elon Musk, announced that his company would accept Bitcoin as payment for any of its models.
Besides, Jack Dorsey, Twitter founder and CEO, partnered with Jay Z on a Bitcoin endowment worth 500 BTC (Approx. $29 million). The endowment called trust focuses on developing the world’s first cryptocurrency in India and Africa.
Starbucks is going into an environment that has adequate pioneers now. In 2020, Burger King Venezuela, a subsidiary of Restaurant Brands International, announced a partnership with Cryptobuyer, a digital assets gateway, to allow it to accept Bitcoin and other crypto coins as payment for its products.
Besides, Yum Brands, which runs KFC, Taco Bell, the Habit Burger Grill, and Pizza Hut, also accept crypto. The restaurant chain also started with Venezuela, just like Restaurant Brands International did. The choice for the South American nation was informed by the never-ending financial woes that devalued its national currency.
Aside from South America, KFC Canada accepted virtual currencies as payment for products. However, the deal that was hinged on BitPay’s digital payments processing platform was short-lived.
Bitcoin’s increasing acceptance now traverses almost all segments of the economy. In October 2020, PayPal announced plans to allow users to spend their crypto holdings to make payments.
The arrangement, which goes live on Tuesday, April 6, gives crypto holders access to the millions of online merchants globally that accept PayPal payments. The move would significantly increase the use of virtual currencies in everyday commerce.
According to PayPal, users who hold Bitcoin, Ether, Litecoin, and Bitcoin Cash in their PayPal-supported digital wallets can convert the said value into fiat currencies at checkout, and use the money to make payments.
PayPal said the service would be available for all its 29 million merchants. According to the company’s statement, this is the first time that crypto holders on the platform can seamlessly use virtual currencies the same way that they apply either debit cards or credit cards inside their PayPal wallets.
Meanwhile, Visa has also announced that it would allow customers to use crypto to settle transactions on the payment network. Visa’s announcement is just one of the many signs of the swelling acceptance of cryptocurrencies by mainstream financial institutions.
The company’s pilot program is run in conjunction with Crypto.com, a virtual currency payments processing platform.
Starbucks is the latest mainstream business to allow customers to use crypto as payment for its products. The coffeehouse chain’s payment app supported by Bakkt, allows users to convert crypto into U.S. dollars to pay for coffee. The company joins an increasing number of businesses including Tesla, Restaurant Brands International, Visa, and PayPal, to name only a few, that have accepted Bitcoin and other cryptocurrencies as a payment option.