PayPal is testing an app-based checkout system in McDonald’s restaurants in France, as the online payments system looks to secure pole position is the increasingly important mobile payments sector.
The trial is being conducted in 30 McDonald’s outlets in France, using a different system than PayPal’s two existing in-store payment systems.
The French trial features a smartphone app or a website from which customers can order and pay for the food with their PayPal account.
The customer can then pick up the food in a separate line, bypassing the normal ordering process.
PayPal’s already has two existing in-store systems, including a point-of-sale system at the cash register and a credit-card swipe system for smartphones. The still-unnamed payment system on trial in France will be a third in-store system, when it’s eventually launched.
The existing point-of-sale system enables PayPal users who have activated the in-store payment system on their PayPal accounts to enter their mobile phone number and a special PIN at the register.
All of the information about the transaction is sent as a receipt to the PayPal account and the phone itself. Consumers can also use a PayPal card that will directly debit funds from their PayPal account at participating merchants.
PayPal’s possible partnership with the world’s most famous burger chain is just the latest development in what is shaping up to an epic struggle for mobile payments dominance across the globe.
Square, PayPal, Google Wallet, and Isis – a joint mobile payment venture from AT&T Mobility, T-Mobile USA and Verizon Wireless – are all fighting to insert themselves between the customer and the merchant.
The key attraction to mobile payments is lower transaction fees for the merchant, who are naturally keen to avoid paying the big-bank credit-card transaction fees that can take anywhere from 1% to 12% of a customer sale, depending on the bank.
PayPal Here and Square’s card-swipe service, in comparison, take a flat 2.7% and 2.75% percent off a transaction, respectively. Transactions made with PayPal credit cards only cost merchants 1.7%, which gives merchants a nice incentive to push the PayPal connection.
Earlier this year, McDonald’s and its UK partner Barclaycard launched an awareness campaign aimed at increasing the use of NFC payment cards at it restaurants. This strategy is likely to be emulated by other retailers worldwide given the relatively slow growth of mobile payments adoption in Western countries when compared to Asia.
Recently, Starbucks announced a major partnership with Square that will allow for mobile payments at the coffee chain.
PayPal also recently rolled out an app enabling mobile payment at four prominent high street retailers.
However, with over 30,000 restaurants worldwide, McDonald’s potential deal with the payments company would represent a larger business and cultural footprint for PayPal than perhaps any other mobile payments company in operation.
So far, PayPal’s other notable retail partners include global brands like Toys “R” Us, Barnes & Noble, Abercrombie & Fitch, Foot Locker, and Office Depot.
