In the first quarter of 2016 Starbucks had US$1.2bn loaded onto its stored-value loyalty cards and its mobile app—more than some US banks have in deposits. The stored value can be used to purchase drinks, food and other merchandise. Sizable though the magnitude of Starbucks’ stored-value quasi-deposits may be, they pale beside those of American Express with US$3.3bn, and PayPal with US$13.2bn of consumers’ cash in its digital coffers. Bigger than all, however, although it is a different sort of beast, is the Yu’e Bao money market fund offered by China’s internet retail giant Alibaba, which earlier this year was reportedly sitting on more thanUS$90bn in customers’ funds.
Reproduced by kind permission of Gavekal Research. (June 20, 2016)