ARCHIVES: This is legacy content from before Industry Dive acquired Mobile Commerce Daily in early 2017. Some information, such as publication dates, may not have migrated over. Check out our topic page for the latest mobile commerce news.

McDonald’s preparing for launch of NFC-based mobile payments system

An internal memo sent to McDonald’s franchises this week informed employees that they must be trained on the near-field communication (NFC) payment systems by Monday, Sept. 15, by which time the hardware must be installed and tested. McDonald’s has been testing mobile payment systems to meet customers’ demands for faster service, accelerated by the mobile mind-shift.

“This is very big news and possibly heralds a quantum leap for NFC in the U.S.  market,” said Wilson Kerr, vice president, business development and sales, with Boston-based Unbound Commerce. “It seems McDonald’s is betting big on the inclusion of NFC in the iPhone 6. With the release of this memo, four years of rumor and speculation might become reality.”

Magic formula
McDonald’s has been aggressively experimenting with a variety of mobile payments strategies in different markets globally as it looks to unlock the magic formula for delivering the kind of consumer value that will drive adoption.

In May, Oak Brook, IL-based McDonald’s launched the Quick Mac mobile application to enable customers in Austria to order food and pay for it via smartphones. The app lets users find the nearest location by map or list, place an order and pay using paybox, Visa, MasterCard or PayPal.

McDonald’s had previously partnered with paybox in Austria to trial NFC payments.

In June, McDonald’s launched its first United States use of a company-branded mobile-ordering and payments application at 22 restaurants in Columbus, GA. The app, available for both iPhones and Android devices, allowed customers to skip store or drive-thru lines by scanning a QR code at a restaurant.

That service did not appear to be NFC-supported.

A nationwide McDonald’s mobile-payment system would come as fast food chains look for ways to build customer loyalty with many embracing mobile. Burger King, Subway and Wendy’s are also at various stages of mobile payments deployments.

“The timing of this announcement and the speed of this hardware rollout/training strongly suggests some cooperation with Apple,” Mr. Kerr said. “However, if McDonald’s is smart, they will ensure their NFC payment system is also compatible with all the Samsung smartphones that have recently become so popular.

“In May of this year, it was reported that Android’s global market share was a dominant 78 percent, versus only 18 percent for Apple,” he said.

Linking coupons
Using NFC would allow McDonald’s, which has about 35,000 restaurants worldwide, to do far more than just accept mobile payments. It could link coupons to redemption and track marketing programs by measuring mobile proof of presence in a store, Mr. Kerr said.

If the iPhone 6 has NFC, McDonald’s will be first out of the gate to try to catch Starbucks and other QSRs that are leading the pack.

“NFC is about to arrive in the U.S. in a big way and smart retailers and QSRs should be all over this trend,” Mr. Kerr said. “Tap to pay means far more than just more sales via preloaded accounts. It means marketing can finally be tied empirically to in-store, incremental sales.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York.