scorecardA Security Researcher Finds A Weakness In The Starbucks Mobile App
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A Security Researcher Finds A Weakness In The Starbucks Mobile App

A Security Researcher Finds A Weakness In The Starbucks Mobile App
Tech4 min read

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In recognition of Martin Luther King, Jr. ay, Payments Insights will not publish on Monday, January 20.

Starbucks Mobile Payments


SECURITY WEAKNESS IN THE STARBUCKS MOBILE APP. Security researcher Daniel Wood says he has found a weakness in the Starbucks mobile app.

The weakness, which only affects iPhones that have the Starbucks app installed, could allow hackers to gain access to a user's app password should the iPhone be stolen.

Starbucks considers the security weakness to be only "theoretical," but is nonetheless adding safeguards to the app, according to a note by Starbucks's Chief Information Officer Curt Garner.

The Starbucks mobile app allows consumers to pay for Starbucks's products using their smartphones at points-of-sale in bricks-and-mortar stores. The app has been phenomenally successful, representing 11% of the company's North American revenue and most of the mobile payment volume seen in the United States.

Security, or a lack thereof, has enormous implications for mobile payments, which have seen growing adoption momentum. Security is one of consumers' top concerns when considering whether or not to use their smartphones to make payments. Thirty-eight percent reported security as one of their main reasons for not using mobile payments, according to a 2013 Federal Reserve Board report.

Due to the Starbucks app's popularity, if the security flaw were exploited, it would likely create a major setback for mobile payments. However, there have been no indications of abuse, according to Starbucks. (Payments Source)

APPLE FILES A NEW MOBILE PAYMENTS PATENT. Apple has filed a new patent on a technology that could use NFC, Bluetooth, or Wi-Fi as a communication frequency. The patent specifically list payments as one of the technology's uses. There are two interesting things about this patent. First, it is further evidence that Apple intends to jump in the payments game at some point. Second, it may be an indication that Apple is considering including NFC antennas in future devices. One huge setback for NFC as a payment technology is that iPhones do not currently come equipped with NFC antennas; iPhones can't be used to pay at NFC-enabled points-of-sale. (U.S. Patent and Trademark Office)

AMERICAN EAGLE OUTFITTERS AND SHOPKICK TEAM UP TO TEST THE IBEACON. Shopkick will reportedly test out Apple iBeacons in 100 American Eagle stores. The beacons will use the Bluetooth LE communication frequency to transmit offers and information about products to consumers' smartphones while they shop in stores. (TechCrunch)

TWITTER CLOSE TO A DEAL WITH STRIPE? Twitter is closing in on a deal with Stripe to allow Twitter users to make purchases on the social network, reports Re/code. If the reports are true, the deal would likely give consumers the opportunity to buy products from retailers without leaving the Twitter feed. This would help Twitter expand further into social commerce and up its ad revenue. (Re/code)

THE SACRAMENTO KINGS ARE THE FIRST PROFESSIONAL SPORTS TEAM TO ACCEPT BITCOIN. Team owner Vivek Ranadivé says the move is part of the King's new business philosophy, "NBA 3.0," which he says focuses on "technology, globalization, and deep community partnerships." Bitcoin payments processor Bitpay will process Bitcoin transactions for the Kings. The Kings are the latest in a flurry of major businesses that have moved to accept Bitcoin. It is still unclear whether these moves are marketing stunts or if the companies see Bitcoin as an emerging method of transaction. (NBA)

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MOBILE BANKING'S RISE SHUTTERS RETAIL BRANCHES. Bank of America closed 300 branches in 2013 and this year it may close about 150 more, according to CFO Bruce Thompson. The reason is that with so many customers using mobile devices to access retail banking services, there is a reduced need for bricks-and-mortar banks. Bank of America saw mobile banking rise by 20% to 14.4 million customers in 2013. In addition, mobile check deposits rose to 9% of all check deposits in the fourth quarter, up from 7% in the previous quarter. (Bank of America)

CARRIER BILLING GETS BIGGER IN EMERGING MARKETS. One of our predictions for 2014 was that direct carrier billing, which allows consumers to add purchases to their mobile bills, is going to be huge in markets where it's more difficult to get credit. It's early in the year, but it looks like this prediction might already be panning out.

The company txtNation just launched direct carrier billing using premium SMS in Kenya. Kenya is an especially promising market for carrier billing companies, due to high mobile and mobile internet penetration. Kenya has over 40 million people and 78% mobile penetration. (txtNation)

Bango opens an office in Singapore. The Cambridge, UK-based carrier billing company announced yesterday that it's opening the new office after a successful 2013 in Asian markets. The company says that Singapore was chosen for the new office because of the availability of technical infrastructure and connectivity to the rest of Asia-Pacific. The company intends to use the new office as a command center for its continued expansion into Asia-Pacific. Bango works primarily with digital merchants like app developers and app stores. (Bango)

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