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McDonald’s Isis play pales in comparison to Starbuck’s payments app

September 13, 2013

McDonald's tries U.S. mobile payments

McDonald’s is testing mobile payments, order-ahead functionality and offers through the Isis mobile wallet. However, limited availability and a lack of employees familiar with the solution suggest it pales in comparison to Starbuck’s industry-leading mobile payments offering.

McDonald’s has been heavily promoting mobile payments in the Austin, TX, area for the past two weeks through in-store, television and radio advertising, according to a local mobile consultant. However, the user experience is not up to par, pointing to the challenges with convincing consumers to pay via their mobile devices.

“I went through the drive-thru to buy a latte and said that I want to use my mobile phone to pay,” said Carrie Chitsey, CEO of Blk24, Austin. “I got a deer-in-the-headlights look from the employee.”

“There is obviously a lot of training that needs to go along with it,” she said. “The level of employees not understanding mobile payments is much different compared to Starbucks – they are pushing mobile payments through a trained staff.”

Streamlined payments
McDonald’s is using the Isis mobile wallet application that Android owners can download to pay for items in markets such as Salt Lake City and Austin.

McDonald’s is reportedly testing the technology to make it easier for consumers to get in and out of the stores as quickly as possible.

“At this time we are testing mobile payment in Salt Lake City, UT, and Austin, TX,” said Ofelia Casillas, media relations manager at McDonald’s, Oak Brook, IL.

“We’re always looking at new technologies to make the McDonald’s experience better for our customers,” she said. “We are testing some of these technologies in a few markets, so it’s premature to speculate on the decisions we may make after the tests, but we’re excited to bring a cutting-edge experience in the future to our customers.”

Blk24’s Ms. Chitsey recently tried to use the technology at a store in Austin via the drive-thru and by going into the store. However, the experience in both cases was lacking.

There is a call-to-action across the top of point-of-sale terminals that features the McDonald’s logo with an image that demonstrates how the technology works.

The call-to-action at the point-of-sale

Consumers can then open the Isis mobile wallet and tap their mobile device against the terminal to trigger a payment that is funded through a credit card linked through the app.

Experiences should be seamless
When Ms. Chitsey pulled up at the drive-thru, she told an employee that she wanted to pay with her mobile phone, but the staff was not familiar with the payment option.

The employee said that mobile payments did not work with drive-thru orders; it only worked in-store.

Ms. Chitsey also went in-store to try to use the technology. However, she does not own an Android device, and an employee acknowledged that not many consumers have used the technology since it only works on a limited selection of mobile devices.

The in-store signage

Several mobile payment trials are taking place in Austin, and Ms. Chitsey said that her experience at McDonald’s with Isis is different than her experience with other mobile payment wallets such as TabbedOut and UMeTime that are available in the city.

Ms. Chitsey’s experience points to the issues that mobile payments present to merchants and franchises with educating employees on how the technology works in addition to creating a strong infrastructure.

Starbucks’ massive role in mobile payments is credited not only to its use in paying for small items, but also because the system is integrated into the point-of-sale system that employees are familiar with.

“It seems like what it has boiled down to is that you can do as much marketing and advertising on the product that you want, but if it’s not a seamless experience, no one will use it,” Ms. Chitsey said.

Mobile past
Earlier this year, McDonald’s finished a tap-and-go mobile payment that was linked to a debit card (see story).

Additionally, last year McDonald’s tested a mobile payment option in France through a partnership with PayPal (see story).

McDonald’s faces significantly different issues with mobile payments in the United States since the technology does not solve the same pain point for consumers that it does internationally where cash is more prevalent.

Other chains experimenting with mobile payments in the U.S. include Wendy’s, Burger King and KFC.

McDonald’s claims that the mobile payment test will also include a loyalty program, special offers and promotions, according to an article from Bloomberg.

By adding incentives and offers to mobile payments, McDonald’s could see a stronger adoption since there will be incentives to keep consumers coming back repeatedly.

“The big improvement to the commerce experience for quick-service restaurants is really about ordering ahead,” said Arkady Fridman, senior analyst/consultant at Aite Group, Boston.

“Ordering ahead benefits consumers as it saves them time, and it also benefits the merchants because it allows faster through-put of customers through their stores,” he said.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York

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