Brief:

• Costa Coffee, the British coffee chain that Coca-Cola is acquiring, partnered with Barclaycard on a reusable coffee cup that has a built-in chip for contactless payments. The "Clever Cup" lets U.K. customers check out at any store, not just Costa outlets, that offers contactless payments via a chip reader, according to an announcement.
• The cup uses Barclaycard's bPay technology to help people track their spending with a dedicated mobile app and to let customers add funds to their Costa Coffee account balance. The mobile app is available for iOS and Android.
• Costa sells the Clever Cup for £14.99 ($19.15) and donates £1 from every sale to the Costa Foundation for youth education. The cup will be available at all Costa stores in the U.K. starting this month.

Insight:

By embedding a payment chip in a reusable coffee cup, Costa Coffee and Barclaycard can help customers check out more quickly compared to having to pull out a mobile phone to pay. The cups also demonstrating the chain's commitment to reducing waste from single-use disposable cups. If the cups catch on, they'll could even serve to drive brand awareness as consumers walk around with the red reusable cups.

The coffee chain in April pledged to recycle 500 million disposable cups by 2020, and now, Costa is supporting its environmental mission while demonstrating its emphasis on easing the customer journey through mobile technology. The Clever Cup comes in packaging made from recycled coffee cups, further demonstrating the U.K. chain's commitment to social issues that many consumers value.

Coffee chains have helped to lead the way in driving adoption of contactless payments. In the U.S., Starbucks has the most popular contactless payment app, according to researcher eMarketer. This year, 23.4 million people ages 14 or older will use the coffeehouse's app to make a purchase at a Starbucks location at least once every six months. The number of U.S. consumers who use contactless mobile payments are forecast to grow 14.5% to 55 million this year, eMarketer estimated, pointing to how more coffee chains will likely follow Costa to tap into the growing trend among consumers.

Costa's chip-enabled mug comes as the number of mobile commerce transactions are set to overtake e-commerce globally by 2019, according to a forecast by 451 Research. Mobile contactless payments also will surpass $1 trillion worldwide this year, with services like Apple Pay and Google Pay increasing at a 30.7% compound annual growth rate through 2022. Despite that growth, contactless payments are still relatively slow to catch on among consumers, as the technology will account for just 1.4% of global brick-and-mortar retail sales this year and reach only 3.8% by 2022, per 451.