Chipotle faces some big challenges in mobile payments

Bloomberg reported today that Chipotle is investing $10 million to add payment functionality to its mobile app and to make other technological upgrades. Employees of the burrito-selling chain are already using “a rough version” of a mobile payments system, according to an executive, and the company is developing an app that enable customers to conduct transactions using Bluetooth or bar codes. The app is aimed at increasing the speed of processing transactions and minimizing “the back-and-forth” actions required with cash or credit card purchases.
Chipotle hopes to take a page from the playbook of Starbucks, whose mobile payment service has seen impressive traction while the rest of the market continues to struggle. But Chipotle will have to address some issues for that to happen: It will have to grow the audience for its mobile app, which has generated just a fraction of the downloads that Starbucks’ app claims. Chipotle will also have to expand its app to include things like kids’ meals, as the Bloomberg piece suggests, and eliminate glitches in the app that have garnered lukewarm reviews. Most importantly, though, the chain will have to integrate the kind of loyalty program that has been the primary driver of Starbucks’ success in mobile payments.