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McDonald’s cooks up mobile payments in China, following KFC

McDonald’s plan to begin testing mobile order-and-pay at some of its restaurants in China as part of an endeavor to connect the online and in-store experience to reach consumers who are increasingly embracing mobile applications.

McDonald’s planned trial of mobile order-and-pay in the Asian country during the current quarter follows the launch there by Yum Brands’ KFC of mobile payments last month, the Wall Street Journal reported.

“Mobile payments and mobile ordering go hand-in-hand and smart brands are testing, learning and iterating as fast as they can,” said Wilson Kerr, vice president of business development and sales for Unbound Commerce, Boston.

“Since quick serve restaurants rely on repeat visits from a dedicated customer base, mobile ordering is a way for them to not only gain a treasure trove of data, but also to delight their customers with the ability to order ‘the usual’ with the tap of a single button, and have it waiting for them when they walk in.”

McDonald’s, Oak Brook, IL, and Yum Brands, Louisville, KY, did not respond to media inquiries.

Speeding service
McDonald’s aim is to speed payment and meet consumer demands as mobile increases consumer impatience with waiting for service, a development already witnessed in Western countries where mobile payments are used.

McDonald’s already uses mobile payment in the United States and was an early adopter of Apple Pay, which launched last year. But analysts say mobile payment is taking off faster in China because, unlike U.S. consumers, Chinese do not widely use credit cards.


McDonald’s order-and-pay in Austria.

Yum said its KFC fried-chicken business teamed up with technology giant Alibaba Group Holding in late June to launch mobile-payment services for 700 of its 4,500-plus stores in China, the Journal reported. Customers can pay for their in-store orders in a few seconds by scanning bar codes generated by Alibaba’s mobile-payment application Alipay.

Attracting more diners and swifter sales is key for both Yum and McDonald’s, after Chinese media reports last summer connected the companies with a restaurant supplier that allegedly sold them expired meat. The companies dropped the supplier, but sales suffered and have not fully recovered.

McDonald’s has been heading in an increasingly more mobile direction in the past year. In Britain, the brand provided wireless charging for consumers in an attempt to ramp up in-store traffic.

In May, McDonald’s launched the Quick Mac mobile application to enable customers in Austria to order food and pay for it via their smartphones.

The Quick Mac app is notable for combining a variety of services, including ordering, payments, offers, push notifications and geolocation.

Chinese consumers’ embrace of mobile applications has prompted brands to explore seamlessly connecting physical and digital realms. In China, which has 885 million mobile users, it is becoming standard to use apps to hail rides and order personal chefs, among other services.

Last month, Uber was spending money at a breakneck rate to crack the China market — even paying its drivers more than the fares they collect, the New York Times reported. Uber, San Francisco, was doling out bonuses up to three times the amount of its fares, in a bet that its exceptional rise in the United States could be matched in China.

Walmart began using Alipay in some stores in China in May. The industry consultants say mobile payment simplifies the checkout process and reduces the chance a shopper will abandon a purchase.

Apple has persuaded developers in China to write apps for the iPhone, helping make that country the largest market for downloads last quarter.

Downloads surging
While downloads of mobile applications in China outpaced those in the U.S. in the recent period, the U.S. still led in revenue, according to App Annie, a website that tracks mobile software.

Testing mobile payments at McDonald’s in Georgia.

“Loyalty programs can be woven in and return visits rewarded by the delivery of special offers tailored to a specific customer,” Mr. Kerr said of the advantages of McDonald’s offering mobile pay and order programs.

Final Take

Michael Barris is staff reporter for Mobile Marketer, New York