Report: McDonald's trialing PayPal mobile wallet services
Fast food giant McDonald's is currently trialing PayPal mobile wallet services enabling consumers to place and pay for orders via dedicated smartphone app or the mobile Web.
Reuters reports that McDonald's first demonstrated the PayPal mobile wallet to franchisees earlier this year during a conference in Orlando, Fla. It is currently testing the service at 30 locations in France--a PayPal spokesperson said that in addition to mobile ordering and payment options, participating stores are instituting a separate customer line to pick up the meals.
Wedbush Securities analyst Gil Luria said mobile wallet efforts could help McDonald's reduce line lengths and customer wait times, decisive factors in improving sales volume. "If they can shave 10 seconds off wait times, same-store sales could go up a lot," Luria said. "It's substantial."
eBay-owned PayPal launched mobile wallet consumer trials in early 2012 across about 50 Home Depot stores. Within weeks the initiative expanded to all 2,200 Home Depot locations in the U.S., and in May, PayPal rolled out the service to 15 additional nationwide retail chains. An agreement with McDonald's, which boasts more than 30,000 locations worldwide, would be PayPal's biggest win to date. "McDonald's would certainly be a whale," Luria said. "If McDonald's customers can stand in line and order on a mobile app and pay with PayPal, that is a huge extension of PayPal's reach."
PayPal's mobile commerce initiatives also include PayPal Here, introduced in March, which enables small businesses and other users to process credit and debit transactions by swiping the card through a small, triangle-shaped dongle that attaches to their smartphone or tablet. Users also can access their mobile device's camera to scan and process cards and checks. More than 300,000 merchants in the U.S. and Hong Kong have signed up for PayPal Here. Last month, PayPal said it expects to handle $10 billion in transacted mobile payment volume in 2012, an increase of 150 percent over a year ago.
PayPal must nevertheless keep pace with rivals including Square, which offers its own mobile transaction dongle. Beginning this fall, coffeehouse chain Starbucks' 7,000 company-owned U.S. stores will begin processing all credit and debit card transactions using Square's mobile commerce technologies, a move to slash operational costs. The Square/Starbucks alliance "creates a sense of urgency for PayPal," Luria said. "This is a race."
- read this Reuters article
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