McDonald’s is expanding its electronic payment tests. The fast food giant has been exploring ways to speed up its service through faster paying methods. As well as making payment quicker, cashless systems promote loyalty and encourage customers to spend more money. But the proprietary system McDonald’s is using might not be the best route to use, as payment by mobile phone begins to take off.
McDonald’s is cashing in on the decreasing amount of patience in American society by making its service even quicker. The fast food chain announced on Monday that it will be expanding tests of several electronic payment systems in the US.
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The largest test will be in the Chicago area, where 400 local outlets have agreed to provide customers with the option of using a cash-free payment device. McDonald’s has been testing the Speedpass in nine restaurants since October 2000. Customers wave a small, barrel-shaped radio transponder at Speedpass readers located both at cash registers and in the drive-through area. The transponder is linked to a regular credit card, which adds the transaction to customers’ normal bills. In alternative trials in Idaho, the same technology will be linked to a pre-pay account that customers can charge up by card.
Going cash-free certainly benefits McDonald’s. The firm can cut queuing times by eliminating the need for customers to dig in their wallets or wait for change. Users also tend to spend more money. Without having to think about cash, customers are more likely to focus purely on what they would like to eat, not what it costs. An additional benefit lies in the customer loyalty element: once a customer has signed up for the system, it becomes even more convenient to buy from McDonald’s.
Electronic payment has a great deal of potential. However, it’s not clear that the McDonald’s solution is a good way to go. In Scandinavia – and now the US, following e-Vend.net’s recent launch – payment for small items by mobile phone is a brighter looking technology. It has the enormous advantage that consumers can use an existing device to make purchases. As mCommerce takes off, McDonald’s transponder solution risks going the same way as other proprietary payment technologies – although on the plus side, it may make it easier for the firm to move to a true mPayment solution.
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