IRVINE, Calif. Terminals that let consumers settle their food tabs quickly by simply waving a "contactless" payment card near a special reader device will be in test at 100 Taco Bell restaurants by the fourth quarter, the 5,800-unit chain said. The move makes Taco Bell one of a growing number of quick-service brands to test or roll out such technology during the past two years.
Officials of Taco Bell, based here, said the test may lead to a rollout to about 1,300 company restaurants and participating franchised units of the technology supporting MasterCard's "PayPass" cards and other devices, such as chip-embedded key-chain fobs. The specialized reader terminals also permit consumers to swipe conventional magnetic stripe payment cards.
"As a quick-service restaurant, we understand the importance of our customers' time, and accepting MasterCard PayPass provides an obvious benefit to them," said Taco Bell Corp. president Greg Creed. "PayPass gives Taco Bell customers the opportunity to order their food, pay for it, grab it and run without having to search for cash."
Contactless payment cards or fobs that transmit data to wireless readers on payment terminals have been available in growing numbers from major card brands, including MasterCard Visa and American Express, in recent years. The technology to support those cards began popping up with growing frequency in quick-service chains in 2005, though some selected pilot tests preceded that by almost two years.
Oak Brook, Ill.-based McDonald's was among the earliest foodservice adopters, as was multiunit Arby's franchisee The Bailey Co. of Golden, Colo. San Diego-based Jack in the Box in December finished rolling out such technology to all of its approximately 1,500 company restaurants and at about 600 additional franchised units. The 7-Eleven, Sheetz and Wawa convenience-store chains have adopted the technology, as well.
However, the new technology has not been a great fit for all the chains exploring its use. Atlanta-based Church's Chicken recently ended a pilot test of contactless readers at three Texas restaurants because of "a lack of usage by our customer base," according to chief information officer Alan Stukalsky.
Officials of some of the chains testing the payment technology have said that it can increase throughput in drive-thrus and at front counters while generating the double-digit increase in average check often associated with consumer use of credit or debit vs. cash.
Payment card organizations would like to see the speed, convenience and flexibility to pay later represented by the new technology cards spur American consumers to whip out those cards in situations where they traditionally use cash, such as at quick-service restaurants. Some estimates suggest there is $1.4 trillion in annual U.S. consumer cash purchases up for grabs, and card groups are motivated by the potential to rake in fees by converting some or all of those purchases to credit transactions.
Some contactless payment card activity was spurred by the popularity of the ExxonMobil Speedpass system used at the pump or cash register for a decade by customers of the Mobil gas station-convenience store chain and, later, a combined ExxonMobil system. Speedpass fobs are tied to a user's ExxonMobil credit account or a consumer's personal credit or debit card. More than 6 million of the chip-centered devices have been issued since 1997, according to ExxonMobil representatives.