How the 5 biggest QSRs are leveraging mobile payments (mobilecommercedaily.com)

McDonald’s, Starbucks, Burger King, Subway and Wendy’s have all kicked their mobile payment strategies into gear this year, but their different approaches point to how this space is still evolving.

Over the past six months, mobile payments have become a more competitive, differentiated feature for QSRs in building long-term loyalty and speeding up the checkout experience in-store. While payments are a big push for many of these brands, the need to also integrate incentivizes and rewards into these apps is a growing area, too.

“QSR-led wallets are deployed for a number of reasons, but increasing loyalty and brand engagement are core drivers,” said Jordan McKee, analyst at Yankee Group, Boston.

“We are also seeing a number of QSRs implementing closed-loop payments in their wallet solutions to drive down payment processing costs,” he said. “In an industry where speed and throughput is a critical success factor, mobile wallets can also help QSRs improve efficiency and decrease queues.”

Here is a look at each brand’s efforts in alphabetical order.

Burger King
Earlier this month, Burger King announced plans to roll out mobile payments nationwide.

As this becomes a more competitive space for QSRs, each brand is aiming to out-do their competitors with additional features that their competitors do not offer.

Burger is lauching a mobile offers and payments app in April

For Burger King, that means claiming to be the first hamburger chain to integrate digital coupons and offers into mobile payments when a branded app launches later this year.

The app will let consumers pay for meals and also dole out national and personalized deals to app users. The coupons will be able to be redeemed at all of the chain’s 7,000 locations.

Similar to other brands’ efforts in this space, the payment functionality will come from a BK Crown Card virtual card that is linked to a credit card.

The app will also include restaurant locators, store information and nutritional information.

Eventually Burger King plans to enable order-ahead functionality and consumer surveys within the app.

McDonald’s
McDonald’s work with mobile payments in the United States has been fairly limited, but the brand has piloted several international efforts.

Most recently, the brand expanded its McDelivery service, which lets consumers place orders for delivery through a mobile app, to Thailand and Singapore.

McDonald’s Sweden also equipped its mobile app with payments earlier this month, and mobile payments are available nationwide in France (see story).

McDonald’s mobile service

Within the United States, McDonald’s has run a number of tests and pilots to gear up for an eventual broader roll-out of mobile payments.

This includes the launch of a branded loyalty app that lets franchises send out targeted and specific offers. The app is live in several markets, including cities in California, Nevada and New England (see story).

Despite the fact that QSRs appear to be one of the industries pushing the envelope with mobile payment adoption, McDonald’s initiatives underscore the importance in brands getting mobile payments right before making them widely available.

Last fall, McDonald’s began testing the mobile payment and wallet app Isis. However, according to a source that tested the payments out, the experience was not up to par (see story).

Starbucks
It is no surprise that many of the brands just now getting into the space are taking pages from Starbucks’ mobile payment playbook.

The coffee giant was an early adopter of mobile payments with its bar code-based payment app that also tightly integrates rewards and a loyalty program.

Using a virtual card, consumers can pay for drinks with the brand’s app that also ties into the My Starbucks Rewards loyalty program.

Starbucks recently revealed during its Annual Meeting of Shareholders that mobile payments represent 14 percent of total revenue within the United States.

At the same time, the brand continues to streamline the user experience within the app. Most recently, Starbucks added shake-to-pay and digital tipping to its iPhone version and will test order-ahead features this year.

As Starbucks looks to build up its mobile and digital initiatives, the brand is also looking for ways to make its loyalty program bigger by potentially taking it out of the bricks-and-mortar stores.

Subway
Subway is reportedly testing mobile ordering and delivery in California with technology that lets consumers virtually build their own sandwiches.

The sandwich chain is also in the middle of developing a payment app that is being powered by Paydiant.

The brand will build in mobile payment and wallet features into its own branded app, and Paydiant’s technology uses QR codes to trigger payments.

Subway’s mobile site

Compared to other marketing verticals, what is interesting about Subway’s and other QSRs’ approaches to mobile payments is the branded app approach. Although it can likely be difficult to get a consumer to download a mobile app, the opportunities to incorporate loyalty programs and other incentivizes seem to be important to QSRs.

Wendy’s
Wendy’s became the first national QSR to roll out mobile payments nationally earlier this month.

The burger chain began testing mobile payments last year in three markets — Austin, Portland and Albuquerque — with a mobile app that also includes nutritional and store information.

The app leverages a one-time, five-digit code that consumers use to pay for meals. The code automatically expires after five minutes and is entered manually into the point-of-sale by an employee.

Wendy’s mobile app

Wendy’s also plans to incorporate a loyalty program that will be used to send out personalized deals based on what products a consumer has bought in the past.

“QSRs of all sizes and types are quickly warming up to the mobile payment opportunity,” Mr. McKee said.

“Collectively, their vision around how mobile can be leveraged to enhance the customer experience has improved significantly over the past few years,” he said. “Mobile payment solutions allow QSRs to better engage with their customers and foster deeper relationships with their most profitable customers.”