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Starbucks tests a cashless store in Seattle (SBUX)

That location won’t accept cash for transactions — tips are still fine — for an unspecified period of time

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Starbucks is running a single-location cashless pilot in a store located in the lobby of a Seattle-based office building, according toThe Seattle Times.

That location won’t accept cash for transactions — tips are still fine — for an unspecified period of time. The store reportedly isn’t using signage to notify customers that it isn't taking cash, instead letting baristas explain it to customers who try. Starbucks is using the pilot, which isn’t planned to expand at this point, to evaluate customer response and garner employee feedback.

Going cashless, especially in high-volume locations, could help Starbucks boost growth.

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  • It could further mobile payment popularity.
  • 36%
  • And doing so could help resolve some of the residual issues that mobile payments cause.

Starbucks’ pilot could point to an industry-wide paradigm shift. A number of restaurants and retailers are going fully cashless, though they're mostly located in major metropolitan areas. It’s unlikely that Starbucks would eliminate cash in the near-term due to the adjustment it would require on the part of the consumer, and because of the 27% of un- and underbanked users who would be alienated by such a move.

But the fact that the chain is even considering it could bring the idea to the mainstream, and push more retailers to make similar moves. This would delight card networks, which see cash rather than each other as their biggest competition, and open up an opportunity for platforms like Apple Pay Cash or Square Cash’s physical card, which make it easier for un- or underbanked users to pay at these locations.

Dan Van Dyke, senior research analyst for BI Intelligence, Business Insider's premium research service has written a detailed report that explores the digital payments ecosystem today, its growth drivers, and where the industry is headed. The report also:

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