Starbucks, the Seattle-based coffee giant, seems to be sending mixed messages to the crypto community. On the one hand, an article in “The Block” stated unequivocally that Starbucks, through its arrangement with the Bakkt exchange, supposedly stated that, “Only U.S. customers will be able to pay in bitcoin initially.” Soon thereafter, in another interview, it contradicted itself, claiming that no digital currency would be accepted directly, but that the firm would instead look for creative ways for customers to convert crypto to fiat for use in their stores.
In that interview with “The Next Web”, a Starbucks spokesperson explained: “Our role as the flagship retailer for Bakkt is to consult and develop applications for customers to convert their digital assets into US dollars, which can then be used in our stores. We anticipate that a range of cryptocurrencies will gain traction with customers and, through our work with Bakkt, we will be uniquely positioned to constantly consider and offer customers new and unique ways to pay seamlessly, at Starbucks. As we continue to move forward with this work, we anticipate we’ll have more to share in the coming months.”
In other words, Starbucks and its broad network of stores could assume the unique role of a “crypto ATM” for all digital assets, using its Bakkt background relationship as its avenue for settlement. Acceptance at the point-of-sale would have been a much taller order, without a critical mass of volume to support the sunk costs up front. With Starbucks, however, you might also expect a more self-serving aspect, as well. Instead of receiving cold, hard cash, the patron would more than likely receive a gift card, usable only at Starbucks franchises. Corporations are not known for their egalitarian efforts.
Yessi Bellow Perez of “The Next Web” quickly fastened onto the nuance in Starbuck’s public statements: “Starbucks allowing consumers to convert their cryptocurrency into fiat is certainly not the same as Starbucks accepting payments in digital currency.” Converting cryptos to a fiat based proprietary gift card is certainly not the same as converting to fiat either.
International travelers may be the biggest beneficiaries, but when they find out that the gift card is only acceptable at Starbucks, the word will spread quickly. When Bitcoin values were on the rise, the issue of merchant acceptance was an easy decision to make. Be the first on the block to accept Bitcoin, and customers would beat a path to your door, while you made a nice profit, if you held the BTC before eventual conversion. When digital values plummeted, so did the enthusiasm for taking a chance on a new payment option. Payment risk was suddenly part of the deal. People backed away, one major example being travel industry giant, Expedia, which quietly curtailed their acceptance of Bitcoin.
The word now is that Starbucks wants “to help crypto users seamlessly move between Bitcoin and fiat.” Per their own statement, more details will be forthcoming. I guess we will have to wait in line a little longer for our crypto Mocha Latte Grande.