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McDonald's Tests Wireless Payment Technology


By Cheryl Rosen
InformationWeek
January 8, 2001 09:57 AM

McDonald's Corp. is testing new wireless payment technologies to make its fast food even faster. Customers at nine McDonald's restaurants in the Chicago area can just swipe their Mobil Speedpass transponders past special cash registers to pay for their Big Macs. Diners in four restaurants in California can do the same with the transponders they use on the tollway, and McDonald's is in talks with Massachusetts officials about a similar deal on the Massachusetts turnpike, which has just hired the fast-food chain to run the concessions along the roadway.

About halfway through their six-month beta test of the Mobil Speedpass, McDonald's officials will not yet say whether they'll expand the program nationwide. But in a business built on shaving seconds off the checkout process, they're clearly interested in experimenting with faster alternatives to paying with cash.

"We want a full six months' worth of data, and then we'll analyze the numbers and the feedback from customers before making a decision," a spokesperson says. "But we think allowing customers to pay with a quick wave of the wand is a great way to cut service time and create convenience for them."

Exxon Mobil says 4.3 million customers carry the Speedpass, which they can use to pay for gas or for goodies purchased at 3,500 Mobil convenience stores. Later this year, the program will expand to Exxon stations and stores as well. The company is peddling the program to drug, video, and grocery stores, but McDonald's is the first retailer to give the transponders a try.

Gartner senior analyst Avivah Litan thinks it's a great idea. The fast-food industry has been struggling for a way to accept electronic payments without slowing down the lines by waiting for credit-card authorizations, she says. "McDonald's use of the Mobil Speedpass is a clever solution that leverages a known and successful offering and doesn't require the installation of a new, untested infrastructure. Transponders provide the best solution for rushed hamburger joints and hungry Americans who expect fast-food checkouts to take a few seconds," she says.

If it catches on, Litan notes, it won't be the first time the food industry paved the way for innovative payment schemes. In the 1980s, the introduction of credit cards at supermarket cash registers caused a huge spike in credit-card usage across the United States.


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