If you saw recent news reports about McDonald’s testing mobile payment technology in Austin, Texas, and Salt Lake City, but wondered what it is they are testing, you were not alone. None of the articles I saw included specifics. But here’s the skinny: Some of those McDonald’s restaurants are working with the Isis Mobile Wallet, as telegraphed by Nation’s Restaurant News in a report last fall.
McDonald’s Corp., through spokeswoman Ofelia Casillas, declined to name the technology involved, but confirmed in an e-mail: “At this time, we are testing mobile payment in Salt Lake City and Austin. … It’s premature to speculate on the decisions we may make after the tests.”
The Isis website, however, includes McDonald’s units in Austin as among the businesses accepting its mobile payments, and McDonald’s operators in Austin have tweeted about their acceptance of such payments on Twitter.
The Isis platform is backed by wireless carriers AT&T Mobility, T-Mobile USA and Verizon Wireless, which, combined, claim access to more than 200 million subscribers. Customers need to have smartphones loaded with Isis software and embedded with near field communication, or NFC, chips or fitted with phone sleeves that have NFC chips. The NFC chip-equipped phones must also be outfitted with a special “enhanced” SIM card.
NFC chips support short-range wireless data transmission between two devices, which would be the consumer’s phone and a merchant’s wireless-data reading payment card terminal, such as those used for swipe-free or tap-n-go cards.
Isis users pass their phones near the payment card reader to complete a transaction and may also opt to receive special offers or take part in merchant loyalty programs. Depending on the merchant’s setup, an Isis user may be able to redeem an offer, pay and update loyalty program information with just one pass of his or her phone over the card reader. Some merchants will only accept Isis payments, and others might also redeem digital offers or exchange loyalty program information, but require the user to show a bar code or numeric code stored in the virtual wallet.
Mobile payment technology interests McDonald’s and other restaurant companies looking to accelerate transaction times. These brands also understand consumers’ love of their smartphones and desire for convenient ways to settle tabs, receive special offers, and track and redeem loyalty program points. Starbucks’ investment in and use of the Square payment platform, which can run on phones without NFC chips or enhanced SIM cards, also attests to that interest, as does the use of LevelUp by the 20-unit Sweetgreen chain.
Whether most consumers will accept a variety of brand-driven mobile payment schemes — one for this restaurant chain, one for another — or hold out for a more standardized approach would seem to be the billion-dollar question. While the mobile payment support industry, by virtue of its fragmentation, has framed that question, some in the restaurant and merchant community — including Goliaths like McDonald’s — are testing their way to an answer.