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McDonald’s bets on delivery service to scale mobile payments

February 19, 2014

Can mobile payments scale for McDonald's in Singapore?

While most fast food giants are testing mobile payments at the point-of-sale to clear up in-store lines, McDonald’s Singapore is taking a page from the success of online delivery services to increase adoption.

McDonald’s Singapore has added payments to its McDelivery program, which lets consumers place delivery orders through a mobile application. The fast food chain has partnered with Visa on the initiative.

“They complement each other by Visa having the know-how to link payments to mobile apps, and McDonald’s has a great brand that consumers love and together they can reach more consumers and get these QSR applications to market quicker than if they try to operate alone,” said Randy Vanderhoof, executive director at Smart Card Alliance, Princeton Junction, NJ.

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

McDonald’s Singapore did not respond to press inquiries.

Fast food
The McDelivery app is available for free download in Apple’s App Store and Google Play.

Currently, only the iPhone app lets consumers pay for meals by entering their credit card information.

The app is set up so that consumers must create an account first that can be linked to a Visa card.

Once the account and Visa card are registered, consumers can pay for items with one click.

McDelivery also lets consumers track their orders and place advance orders.

Additional app features include the option to view menus and learn more about products.

Most areas that McDonald’s Singapore delivers to require a $10 minimum order. The exceptions are the Marina Bay Sands, Ocean Drive, Jurong Industrial Area/Tuas, Changi/Loyang and Seletar areas, which includes a $60 minimum order.

All orders also include either a $3.50 or $4 delivery charge.

The fast food giant claims that this is the first use of mobile payment for delivery services by a QSR within Singapore.

A screenshot of the app

The program also includes a Web site where consumers can place and pay for orders. The mobile version of the site does not include commerce functionality.

Focusing on delivery services versus in-restaurant experiences is an interesting move from McDonald’s Singapore and shows the various ways that QSRs are testing mobile technology to drive sales.

McDonald’s competitor Burger King offers a similar service within the United States that lets consumers in cities including Boston, New York, Chicago and San Francisco place delivery orders through a mobile and desktop site.

International focus
McDonald’s has put significant resources behind mobile payments internationally while the brand has been more focused on building up loyalty in the U.S.

In November, McDonald’s rolled out mobile payments nationwide in France (see story).

A branded McDonald’s mobile app lets consumers place orders and pick them up in a dedicated line in-store.

McDonald’s originally began piloting the app in August 2012 (see story).

Within the U.S., the fast food giant’s most recent efforts have been around testing a loyalty-facing mobile app in different demographics (see story).

“QSRs are embracing mobile apps to provide consumers with faster, more convenient ordering options and by combining mobile wallets with the ordering apps, it provides both consumers and retailers with a complete turnkey solution,” Mr. Vanderhoof said.

“U.S. retailers like Starbucks, Dunkin Donuts and Cumberland Farms are already running very successful mobile ordering and payments apps,” he said.

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

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