Subscribers to my investment newsletter PowerTrend Profits have heard me mention this subject more than a few times while we were invested in Starbucks (SBUX). I'm not referring to the return of more than 40% that they earned holding SBUX shares -- that is something to talk about -- but I'm referring to the Starbucks App. It's one of my favorite apps, if not my most favorite. You might be wondering why. The app allows me to pay for coffee with my smartphone and, because it is linked to my credit card, can top off my account whenever I need it. It also keeps track of my reward points and lets me download all sorts of free digital content from Starbucks -- music, games and more from Apple's (AAPL) iTunes store.
All in all, it is pretty slick. If you've been in line at any Starbucks location, I bet you have seen someone pay for coffee and other items with a smartphone. What's amazing to me is you can leave home without your wallet and still manage to get a good cup of coffee. It sounds like American Express will need to change its one infamous tag line, "Don't leave home without it."
With mobile payments accounting for almost 15% of Starbucks payments, I'm not surprised by the recent news that many other companies are jumping on the mobile-payment bandwagon. Some companies, like Papa Johns (PZZA), Domino's (DPZ), Chipotle Mexican Grille (CMG), Five Guys and others, already have apps that allow you to order while on the go, but these new entrants would also let you pay from your smartphone. During the last week, both Burger King (BKW) and Wendy's (WEN) announced they too will be accepting mobile payments, while McDonald's (MCD) is testing mobile payments.
Chris Versace is the editor of PowerTrend Brief — a FREE, weekly electronic newsletter. He also writes PowerTrend Profits, a paid monthly newsletter that helps individual investors profit through buying shares of companies poised to win big in the 8 PowerTrends, as well as writes the PowerTrader trading service that seeks to deliver short-term gains using stocks, ETFs and options. Chris has been ranked an All Star Analyst by Zacks Investment Research.
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