McDonald’s E-Payment system

This report will describe McDonald’s e-payment system as a work system and how this system works, its advantages, limitations and any other challenges that McDonald has faced in implementing this electronic business system. INTRODUCTION Giant food chain McDonald’s is expanding its use of an electronic business system that lets its clients pay for their respective orders using a cash-free key tag system that was originally created for the Mobil gas stations. This electronic business system is an e-payment system and the speed pass is a transponder that is normally kept on the key chain of a customer.

When a client makes a purchase, the gadget that is the speed pass mechanically sends a signal to the credit or debit card account so that the client’s purchase can be included on the next monthly bill of the client. This report will attempt to find out if this e-system has any challenges or limitations and whether McDonald’s clients find it efficient or if they prefer the traditional mode of payments for their orders.

DISCUSSION

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McDonalds has somewhat revolutionized the manner in which restaurants are now using technology.

Over the years, the food giant has continued with its efforts to advance technology. For instance in the 1970s, the food giant spearheaded the food industry’s transition from old fashioned cash registers to computerized point of sales systems that can track massive amount of data in a matter of seconds. In the 1990s the food giant was also among the first to install touch screen computers at the front counters and in the drive-through areas thus making it relatively easier for clients to input orders.

Since then, the food giant has kept the wheels of invention turning with tests involving touch screen self ordering kiosks for their clients, mobile POS devices and clients order centers. The speed pass also deducts tolls from a certain prepaid account of the client and there is also another version known as E-ZPass that is usually affixed to a vehicle’s windshield behind the rearview mirror. Many of McDonald’s clients take their orders using this system and the cashless system is quite appealing to most of them.

However, in some cases clients normally tend to resist any new technologies but if the technologies guarantees them that a lot of time will be saved, then most of them embrace the technology. This is what happened to the e-payment system at McDonalds. Customers of McDonalds normally wave a small, barrel shaped speed pass transponder at the cash register after taking their orders or at a drive-through window (Hess, 2010; 24). After the clients wave this transponder at the cash register, each speed pass then charges the relevant purchase to a debit or credit account.

The main objective of speed pass is to position speed pass as the client identification and e-payment system of the present and future. For the client, speed pass is a system that will definitely simplify the lives for the clients as the e-payment system is more convenient. However, the young generation has already embraced this e-payment system though the older generation is much harder to convince to adapt the system. The ease and the speed of this e-payment system will facilitate faster line movement both at the drive-through store’s locations as well inside the store.

In addition to this, clients will benefit from the convenience of the expanding network of the speed pass vendors (Mehta, 2000; 37). For that vendor, McDonald’s speed pass recommends the opportunity to identify their clients therefore improving the range of offerings in customer’s loyalty and reward programs (Rottenberg, 2000; 48). McDonald’s clients usually sign up for their speed passes at the store’s web site. This system is also quite similar to another one that McDonalds is developing in Boise where there is a freedom pay wand that contains a microchip with a client’s identification number, which is read by the sensor.

In addition to this, the relevant information is electronically transmitted to another computer server where the account of the client is charged (Martinez, 2003; 57). The customers who have use this system load their freedom pay account over the internet or phone while using their debit or credit card. The clients who use this system state that it combines their loyalty to McDonalds with a very cashless system and this is quite appealing to them. The significant guiding force in the food giant’s deployment of technology that is the e-payment system is the company’s plan to win initiative. 

Also read why buying a franchise might be a good decision 

The plan to win had five focus areas that are: place, people, price, product and promotion. Additionally, this company developed a store technology board to help deliver on its plan to win. The store board is compromised of franchisee and corporate representatives and is also responsible for ensuring cost effective and timely communication with the food giant’s stakeholders as well as leveraging technology resources and talent where they existed (Shields, 2003; 64).

The collaboration with the technology board has facilitated the food giant to move forward in a clear path as well as to accomplish the significant business requirements across their stores. Additionally, the store had to adopt a cashless system that is, the speed pass e-payments system. When addressing payment options, the management of McDonalds states that there is nothing is quite convenient than the e-system and electronic payment that comes with the e-system.

The customers do not have to issue checks, swipe their credit or debit cards or handle money or coins when paying for their orders; all they have to do is use the speed pass for their payments in McDonalds. According to Enz (2009; 67), more than three thousand customers have already signed up for the program that essentially gives them the convenience of waving their speed pass wands in front of an electronic sensor to pay for their orders or meals. Once the customers adapt this system, fumbling for loose change or looking for smaller bills will be a thing of the past.

Challenges for McDonald’s e-payment system The biggest challenge for McDonald’s e-payment system is finding clients who are willing to embrace the technology and this has somewhat created a chicken and egg effect (Hitchcock, 2009; 78). In addition to this, software and bank companies who are needed for the e-payment system to effectively work cannot get clients without the much needed vendors and they cannot also get vendors without clients. Therefore, for this e-payments system to effectively work McDonald has had to risk investing in this e-payment system.

Furthermore, security factors are the biggest fear for McDonald’s clients who are very interested in using the e-payment system while paying for their orders. Most clients fear giving out their credit or debit card numbers not knowing who will be able to retrieve that kind of information without their consent. It is quite interesting to note that most individuals do not even give it a second thought when buying their orders with their speed passes but for some of them the idea of using the speed passes makes them uncomfortable to use it due to their privacy fears (Hess, 2010; 87).

Evaluation of McDonald’s e-payment system The first part of McDonald’s e-payment system evaluation is to determine the operation of the e-payment program. This evaluation will attempt to answer two questions

• What is the result of the e-payment program? Did the e-payment program have an impact in McDonald’s?

• How did the evaluation of the e-payment program get to the result or the outcome? Did the e-payment program follow some procedures and if it did, were these procedures followed? Were these procedures reasonable and was there a much better way to get the outcome of the e-payment program?

One way of determining the evaluation question involving the e-payment system is for the people involved in the e-payment system as well as the McDonald’s management to develop a good report of what the outcome of the e-payment system will be, how the e-payment system will lead to a positive outcome and why the evaluation of the e-payment program will lead to the outcome. A good understanding of the evaluation of the e-payment program will help identify how the e-payment system will lead to the result, why the activities of the e-payment program should lead to the results and where to assess the program (Sofo, 2000; 98).

The main reasons why system evaluation is carried out from a business perspective are as follows:

• To resolve any conflict or clarify roles related to the implementation of speed pass e-payment system

• To rank order needs and goals

• To help McDonald’s make any incremental improvements regarding the e-payment system

• To determine the immediate initial effects or outcomes of the e-payment system

• To improve e-payment system for any future implementation

• To determine if the e-payment system is worth the financial resources that McDonald’s has invested in will consume.

• To assure that the e-payment program is being executed as planned.

• To improve the e-payment program

• To dissemination or continue with the e-payment program:

Make an overall decision about whether to continue with the e-payment services or not. The information that will be needed will include the effects and the outcomes of the e-payment program. Furthermore, this information will also include the extent to which the e-payment program will serve the need at a fair and reasonable cost as well as what it will take to implement the evaluation program (Turban, 2004; 132).

• To be accountable for the e-payment program: Provide the relevant information to the funding agents to make the necessary decisions regarding the funding of the e-payment program, intervening in the management of the e-payment program and making vital decisions regarding it. In this case, the information that is needed includes how well the e-payment program is meeting its intended goals (Evans, 2003; 154). Deciding on the main objective or purpose of the e-payment program evaluation is normally the most important decision that is initially made about this evaluation (Royle, 2002; 168).

METHODOLOGY & RESULTS

Twenty loyal McDonald’s clients were used for this research and the main method of data collection that was used in this research was the use of questionnaires. Ten of these clients ranged from the age of 18-early 30s while the other ten were from the age of 40s-early 60s. The questionnaires attempted to ask them various questions such as: preferred method of paying for their orders, age and other significant questions.

After the twenty participants finished filling out their questionnaires, they handed them over and the results were as follows: The younger clients were very comfortable with using the speed pass e-payment services while the rest were somewhat apprehensive about it. The reason for their hesitancy to use the speed pass e-payment system was that they were somewhat fearful of their privacy. However, the younger participants were quite comfortable and they even stated that they e-payment system was quite fast, reliable and easy to use.

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