Mobile payments take a tottering first step: Starbucks

It's the dream of mobile payments: Walk into a store, make a purchase and wave your cellphone over a reader at the register. You don't have to get your wallet out of your pocket, count out the change, enter your PIN or anything! And you can even do that right now! How great, right? It is buying physical goods from a mobile application.

OK, perhaps we need something of a reality check here.  There are some restrictions on being able to do this. It's an application called Starbucks Card Mobile

• The application works only with BlackBerry and iPhone
• The only store accepting the mobile payment is Starbucks
• The Starbucks stores are all in New York, Seattle or the San Francisco Bay area and many of them are inside Target stores

So that's pretty restrictive. But the basics are there and really hold the promise of much greater capabilities.

The way it works is that you keep your balance information on your smartphone, where you can add money from the application. When you order your frappuccino, you start the payment application, which generates a bar code that's displayed on your phone's screen. The barista scans the bar code and all the magic happens online, debiting your card and updating your balance. 

When will this make more sense and be used by more people? It'll take a while, but when we see more more merchants, more phones and more ways to pay. Ultimately, rather than "stored value cards," you could access your debit card or credit card this way and use it at any store. How soon will that be? Hmmmm. Probably not this year, but this is sufficiently high-profile that it will probably get this ball rolling.