A hand drops a coin into a Starbucks paper coffee cup, symbolizing the principle of a Starbucks bank

Is Starbucks Becoming a Bank? And If So, Should You Become One, Too?

Portrait of Camillo Crispino, Head of Marketing at trimplement
Camillo Crispino takes a deep dive into Starbucks’ embedded finance ambitions

Starbucks could be turning into a bank. Not that they talk much about this fact. But for a few years, the coffee giant doesn’t content itself with brewing up your morning cup of coffee only. They’re brewing up their own financial services, too.

At the center of this venture stands the Starbucks App and the in-house loyalty program Starbucks Rewards. Together, those components have formed an unlikely financial services ecosystem enclosed in the Starbucks brand. The Starbucks App allows customers to order and pay contactless in Starbucks branches. And by paying like this, they also gather loyalty points for the Starbucks Rewards program to spend on benefits.

This development has only accelerated over the years. Yet, it also has suffered pushback in the recent past, when Starbucks changed the loyalty points/free drinks ratio – making some items cheaper and others more expensive in terms of loyalty points to spend getting them. Yet, the outrage only proves how popular Starbucks’ Rewards program is.  

And one other popular practice related to the Starbucks App has made headlines over the last years: As user numbers of the Starbucks App rise, so does the amount of money deposited on their prepaid cards. Electronic money laying unused on card accounts… has Starbucks turned into a bank? And is this a business model, other companies might want to adopt? 

Well, don’t start depositing your spare change into a latte cup, just yet. Let’s take a look at what’s really going on behind the scenes first. In the following paragraphs, we will explore:

  • How Starbucks turned from a coffeehouse to a fintech player
  • Which benefits the company reaps from its financial services
  • If Starbucks is actually a bank now
  • How other companies can embark on the same route as Starbucks – and profit from it
Read More