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Tuesday July 27, 05:05
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Card payments reaching critical mass
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By end-2004, McDonalds’ will accept credit cards at up to 8,000 of its 13,500 stores, while Burger King aims to take credit cards at half of its restaurants and Wendy’s plans to accept credit cards at 95 per cent of its stores, according to ePaynews. All told, the USD 105 billion fast-food industry is shifting towards card payments to increase average ticket sales and reduce customers’ waiting time. Wendy’s, which accepts cards at 90 per cent of its branches, reports cashless purchases to have a 35 per cent higher average ticket price than purchases with cash, as payments jump to an average of USD 7 per purchase, up from USD 5 with cash.
McDonald’s moves, as the largest fast-food chain in the US, to accept credit cards are likely to have the biggest impact on cashless purchasing trends in the industry, particularly given its plans to introduce a gift card in the near future. In March, McDonald’s partnered with American Express, to take Amex payments at 3,000 of its stores, and aims to extend this total to 6,000 by year’s end, while building its use of credit, debit and PIN-debit cards. Taco Bell similarly expects all its US stores to accept credit cards by year’s end, while Jack in the Box plans to equip 90 per cent of its stores for card payments.
Just 3 per cent of fast-food payments are conducted with plastic, according to Visa USA, but the waiving of signatures for card payments at quick-serve restaurants (QSRs) and drive-thrus will entice customers to use their cards more often, as will the chance to earn air miles or loyalty points. MasterCard charges QSRs a reduced interchange rate for card payments of about 1.8 per cent of the transaction’s value, while Visa levies a rate of 1.65 per cent plus 4 cents. The Star PIN-debit system, operated by First Data Corp, charges a flat rate of 12.5 cents for QSRs, according to the Maryland Gazette.
In Illinois, some McDonald’s franchise owners are using credit card-enabled vending machines to replace manned counters, while five stores in Denver are testing in-store kiosks following a pilot in Raleigh, North Carolina. Tests of call center technology at a handful of McDonald’s stores in the US have cut about 30 seconds off average order times at the drive-thrus connected, to 1 minute 5 seconds, almost less than half of the average of 2 minutes, 36 seconds for all McDonald’s stores. Drive-thrus using the software also handle an average of 260 cars per hour, 30 more than before the call center operations started.
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