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McDonald’s mobile payments ambitions grow internationally

November 15, 2013

McDonald's expands international efforts

McDonald’s expansion of a mobile payment pilot in France to a nationwide rollout indicates that the fast food giant is seeing some traction for mobile payments internationally.

The chain originally launched a pilot program in France last year in 30 locations as part of a partnership with PayPal. At the same time that McDonald’s is trialing international payments, mobile payments continue to gain prevalence in the United States, where Isis this week launched its mobile payments wallet nationwide following a year-long test in two cities.

“Mobile payments are going to be very important to a small percentage of the population who are very mobile-centric in their life,” said Randy Vanderhoof, executive director at Smart Card Alliance, Princeton Junction, NJ.

“Mobile payments like Isis and PayPal are going to be more important in segments of the market where speed and convenience and low-value transactions, like fast food and transit, and for customers who use these services most will be adopted the fastest,” he said. “Mobile payments is a long-term transition that will build over the next five to ten years.”

Mr. Vanderhoof is not affiliated with McDonald’s. He commented based on his expertise on the subject.

McDonald’s did not respond to press enquiries.

Hungry for mobile
McDonald’s is now reportedly expanding its mobile payment program to 1,100 locations in France.

Consumers can place their orders either through a mobile application or online that is tied to a PayPal account.

Then consumers can pick up their order from a dedicated line in restaurants, and the order is confirmed at the point-of-sale by either scanning a QR code or typing in a PIN number.

Although large-scale mobile payment programs from QSRs are not common in the United States, many fast food chains have piloted programs internationally to test the technology on demographics where adoption is higher.

Additionally, France is McDonald’s second-biggest market after the United States, highlighting the scale that the fast food chain is reaching with mobile payments internationally.

QSR marketers are particularly interested in mobile payments since small items such as meals make some of the best use cases of how consumers will switch over to mobile to pay for items.

Making loyalty inroads

At the same time that McDonald’s is expanding its international tests, the chain is also ramping up its loyalty-based mobile features within the U.S.

Although the commerce functionality is a necessity for mobile payments to take off, many marketers are overlooking loyalty’s ability to drive value for consumers.

Most recently, McDonald’s began working with a company called FrontFlip to offer consumers rewards in specific regions in the United States (see story).

A recent email from FrontFlip promoting rewards from McDonald’s

Additionally, McDonald’s has been piloting the Isis mobile wallet in Salt Lake City, UT and Austin, TX this year. With the national roll out of Isis, mobile payments will presumably be available in more McDonald’s locations as well.

With Isis’ official nationwide launch, there could be a bigger opportunity to make near-field communication technology more mainstream in the U.S.

As part of the launch, the Isis app features a new interface and also integrates with American Express’ Serve.

Additionally, offers from Jamba Juice and Coca-Cola are included in the app to incentivize consumers to use their mobile device to pay for items.

“Collectively the Isis joint venture represents the vast majority of mobile market and through their retails stores and distribution channels, they can deliver the consumer marketing and education needed to explain how mobile wallets work and show consumers how they can get offers and use the wallets,” Mr. Vanderhoof said.

“Consumers upgrade their phones every 12–18 months, which means Isis gets to interface with their customers,” he said. “This will move NFC very quickly.”

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

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