AAPL Apple Inc

By Douglas MacMillan 

Apple Inc.'s fledgling mobile-payment service is getting a boost from Starbucks Corp.

The coffee retailer will begin accepting Apple Pay in some U.S. stores this year, Jennifer Bailey, Apple's head of payments, said Thursday at a tech conference in Half Moon Bay, Calif. All 7,500 U.S. coffee stores owned by Starbucks will accept Apple Pay by the end of 2016, Ms. Bailey said.

The rollout could help Apple broaden consumer appeal for its mobile payments, a technology that has failed to gain wide adoption despite many high-profile efforts by numerous tech giants. Apple's service, launched a year ago at about 220,000 U.S. locations including McDonald's and Macy's, prompts shoppers to ditch their wallet and make purchases with an iPhone.

Instead of swiping a card and signing a receipt, shoppers using Apple Pay wave an iPhone--or an Apple Watch--in front of a wireless reader and complete the transaction with a fingerprint.

More than one million stores now accept Apple Pay, a number the company predicts will grow to 1.5 million by the end of this year. In addition to Starbucks, Apple said Yum Brands Inc.'s KFC and Brinker International Inc.'s Chili's plan to accept the payment service. An integration with Best Buy Co., that was announced earlier this year, went live in the electronics retailer's 1,400 stores this week.

Previous efforts by Google Inc., eBay Inc. and a host of startups to prod shoppers to pay for purchases with a mobile phone have languished, because consumers didn't see an advantage over swiping a credit or debit card.

During the onstage interview Thursday, Ms. Bailey said Apple's service is growing in popularity because it has focused on its users, not on making money.

"Some of our predecessors in the space were focused on the business model," she said. "We were focused on, 'How do you make the best customer experience?'"

Ms. Bailey said retailers are beginning to customize the payment service in different ways, such as adding digital versions of loyalty cards or making it easy for restaurant customers to pay from their table, without the help of servers.

The next big area for expansion could be travel, where consumers rely heavily on their phones for information and entertainment, Ms. Bailey said. Apple Pay could soon be used to help airline passengers order and pay for food and movies, she said.

Ms. Bailey's interview at the tech conference was a rare public appearance for a high-ranking woman at Apple. She said the company has put more effort into improving diversity in its ranks, creating an inclusion and diversity team and supporting programs such as the National Center for Women & Information Technology.

"It's something that we talk about more," Ms. Bailey said. "But I feel like Apple is a meritocracy; it's about what you do and how you do it. The core culture hasn't changed."

Write to Douglas MacMillan at douglas.macmillan@wsj.com

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(END) Dow Jones Newswires

October 08, 2015 19:57 ET (23:57 GMT)

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