January 15, 2001

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McDonald's Serves Up Faster Payment System

Fast-food chain is testing the use of ExxonMobil's Speedpass

By Cheryl Rosen

More on wireless technology:

McDonald's Tests Wireless Payment Technology (1/8/01) Computer Reseller News: Report Paints Gloomy Picture For Mobile Market (CRN1/8/01) TechWeb: Wired Starbucks Gets Lukewarm Reaction (1/5/01)

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cDonald's Corp. wants to make its fast food even faster. Customers at nine McDonald's restaurants in the Chicago area can swipe their ExxonMobil Speedpass transponders, used for instant payment at the gas pump, at drive-through windows or cash registers to pay for their food, the fast-food giant said last week.

Diners in four restaurants in California can do the same with the transponders they use to pay highway tolls, and McDonald's is in talks with highway authorities in New York and Massachusetts as well.

The program is the brainchild of McDonald's technology manager Natalie Johnson, who says that while paying at a Mobil pump, she thought "how cool it would be to use the drive-through and not have to search for cash." Customers wave the small, black cylinder over a computer device, and the purchase is deducted from a credit or debit card.

McDonald's is about halfway through its six-month Speedpass beta test and won't say if it'll expand the program nationwide. But in a business built on shaving seconds off the checkout process, the company is interested. "We want a full six months' worth of data before making a decision," a McDonald's official says, "but allowing customers to pay with a wave of the wand is a great way to cut service time."

ExxonMobil says 4.3 million customers use the Speedpass to pay for gas and convenience-store items at 4,200 Mobil stations and 3,500 stores. Later this year, the program will add 1,800 Exxon stations and stores. The company is talking to other retailers, but McDonald's is the first to sign on.

Gartner senior analyst Avivah Litan likes the idea. "Speedpass is a clever solution that leverages a known and successful offering and doesn't require the installation of a new untested infrastructure," she says.

But Jupiter Research's James Van Dyke says no alternative to cash will ever catch on unless it's accepted in at least two-thirds of the places where consumers shop.

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