Starbucks partners with Microsoft and ICE to launch new cryptocurrency platform

Image source: pixabay - Free-Photos

A new cryptocurrency platform, Bakkt, which converts Bitcoin and other altcoins into US dollars for payment. While many companies are still reluctant to accept Bitcoin directly due to its volatile market value, a currency conversion might work. Currency conversion is already a routine process for many credit cards, where payment in other foreign currencies would be converted into the local currency of choice.

Credit card companies are charging high conversion fees, usually in the range of 3-5%, making currency exchange a hassle and large volume of purchases may be troublesome to customers. With Bitcoin's blockchain, international transactions become borderless, and fees will be based on each transaction (mining fee) as well as middleman charges given to the exchange.

We have already seen Coinbase rolling out digital currency gift cards and a growing list of companies willing to accept Bitcoin. The trend will continue to grow as more people who are holding digital wallets realize its full functionality.

"As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks," Maria Smith, vice president of partnerships and payments for Starbucks, said in a statement.
Source: CNBC - Sarah Whitten

Image source: pixabay - analogicus

Previously, cash and physical credit cards have been implemented as our payment options. Until recently, electronic payment options such as Android Pay, Apple Pay and Alipay have replaced the physicality of having a dollar note. In the simplest terms, Bitcoin is a just another global currency that a niche group of people have been using them, just like any other foreign currency. All it takes is an exchange to do the conversion.

Brian Kelly, founder and CEO of BKCM, has taken the good news too well. It has led to many articles thinking that Starbucks would be taking Bitcoin directly from its customers. Here what he said:

"It's very big news for bitcoin because people say, 'Where can you spend it?' Now at every single Starbucks. Starbucks is seeing some kind of demand for acceptance of crypto and bitcoin, and to tie up with a huge regulated institution like the ICE is really positive for the space."
Source: CNBC - Sarah Whitten

Starbucks later quickly clarified while Starbucks doesn't want Bitcoins, it’s willing to help people spend them. Bakkt is an exchange that will allow people to convert their cryptocurrency into US dollars, which they can then spend at Starbucks locations. Source: motherboard - Jordan Pearson.

“It is important to clarify that we are not accepting digital assets at Starbucks. Rather the exchange will convert digital assets like Bitcoin into US dollars, which can be used at Starbucks. Customers will not be able to pay for Frappuccinos with bitcoin.” a Starbucks spokesperson an email to motherboard.com.
Source: motherboard - Jordan Pearson.

Image source: pixabay - Pexels

Starbucks is no stranger to new payment options. In fact, the Starbucks Card is an electronic payment option for Starbucks customers. Like any credit card, the Starbucks Card has a 16-digit code and a hidden security code. Beware that its magnetic stripe (CVC1) is susceptible to card skimming fraud. Hence it might be safer to store your Starbucks card in your mobile app, verifying the card using your CVC2 code. If your card is stolen, like any debit card, all your value will be stolen and companies cannot restore its value.

It is currently unclear how exchanges like Bakkt would issue their services, however mobile electronic conversions would be the best bet. It could be as easy as scanning a QR code at the Starbucks store, and transferring your Bitcoin from a local Bakkt coin wallet to the merchant. No matter what, cheaper coffee rather than Starbucks is naturally preferred.

-tysler