McDonald’s To Expand E-Payment System

Fast-food giant McDonald’s (NYSE: MCD) is expanding its use of an electronic system that lets customers pay for their orders using a cash-free keytag system originally developed for Mobil gas stations, a company spokesperson said Monday.

Operators of more than 400 Chicago-area McDonald’s restaurants recently agreed to give their stores the option of letting customers use the Speedpass system at drive-thru windows and counters. The idea is to speed lines by eliminating waits as customers and clerks fumble for change.

The Speedpass is a transponder that can be kept on a customer’s key chain. When a purchase is made, the gadget automatically sends a signal to the credit card account, so that the purchase can be included on the customer’s next monthly bill.

McDonald’s spokesperson Lisa Howard told the E-Commerce Times that the company does not know yet whether the plan will go national. McDonald’s has been testing the system in the Chicago area since October, when it began a pilot program in a handful of restaurants.

Idaho Success

In April, McDonald’s expanded the program to include 29 restaurants in Boise, Idaho, according to FreedomPay, the company that developed the MicroTrak system that enables the cashless payments.

“The response has been overwhelming,” Bob Pons, president and co-founder of FreedomPay, told the E-Commerce Times.

Howard said that the Boise pilot plan is scheduled to run for a total of six months. There is no end date set for the Chicago tests, Howard said.

Big Plans

Wayne, Pennsylvania-based FreedomPay, which works with vending-machine companies, among others, on cashless payment systems, said earlier this month that it expects to announce its first convenience-store partner for the system soon.

FreedomPay customers sign up for the program either by calling a toll-free number or registering online via the company’s Web site. At some partner companies, notably vending-machine maker Canteen, on-site representatives can help employees set up accounts.

‘Micropayments’ Add Up

At Sears Credit in Boise, employees can use the e-payment system at vending machines in their offices as well as at the local McDonald’s, said Pons.

Pons said his company aims to capitalize on the “ubiquitous nature” of the e-payment economy by targeting the micropayment sector. In the micropayment market, vendors are working to create cost-efficient payment plans for the electronic payment of small dollar amounts.

“Our focus is on those small, everyday payments” that can add up to billions of dollars as the idea catches on, Pons said.