NEW YORK-At the suggestion of a franchise owner-operator, McDonald’s Corp., Oak Brook, Ill., has decided to add wireless electronic payment to its menu at several restaurant drive-up windows in Southern California.
The trial should be encouraging to wireless industry observers and participants who believe mobile e-commerce will begin eating away at this country’s entrenched magnetic-stripe-card infrastructure through vertical applications.
However, the pilot program bypasses handsets and commercial carrier networks altogether. Consequently, the experiment also might provide a cautionary tale to boosters of the idea that wireless phones, enabled with specialized smart cards, will become the primary vehicle for mobile electronic purse transactions.
The test began in the spring and will conclude by summer’s end, at which time participants will evaluate whether to expand the trial further. More than halfway into the pilot at four Orange County, Calif., restaurants, the program is an apparent hit with customers, the fast-food giant and the two Transportation Corridor Agencies-quasi-governmental authorities responsible for toll roads.
For an undisclosed commission, these joint powers authorities act as the third-party billing and collections service for McDonald’s. For each electronic purchase, McDonald’s reduces transaction time by valuable seconds that add up to significant money savings.
Consumers pay for their fast food with their “Fastrak,” the Transportation Corridor Agencies’ branded name for its toll road payment transponders, which Toronto-based Sirit Technologies Inc. supplies. Fastrak operates on the TCA’s radio-frequency network. In a related development and as an added bonus, new generations of Fastrak transponders will run primarily on the sun, Sirit announced in late July. Doing so will prolong battery life, reduce battery disposal and provide a free primary power source.
Lisa Howard, McDonald’s spokeswoman, said the Fastrak idea is just one of many the company has tested or implemented that were suggestions from its franchisees.
“One of our owner-operators who uses the transponder to pay tolls said, `Why not use the same device to pay for meals?,'” said Howard.
“Our customers absolutely love it because it’s a great convenience and shortens travel time in the drive-through lanes. … We will take a hard look at the results before deciding whether to expand the program.”
In a small but direct way, earnings from the Fastrak-McDonald’s venture will help repay revenue bonds the Transportation Corridors Agencies sold to finance construction of several major arteries in Southern California, said Frank Barbagallo, manager of toll operations.
The TCA was established in 1986 to build roads financed entirely by the revenues they generate. Once their road-building bonds are repaid, the two agencies will sunset in their present incarnation. Ongoing maintenance of the highways will remain the state government’s responsibility, as it is today.
However, if Fastrak catches on in a widespread way as a mobile commerce option, it is conceivable these public-private agencies could re-emerge in a new corporate incarnation as conductors of mobile commerce for consumers, Barbagallo said.
“If successful with McDonald’s, I can see this application being used for many other things we call mobile commerce. Growth will be unconstrained. I can imagine Fastrak not only in the windshield but in something like a key fob so you could charge your groceries,” he said.
“We are evaluating its revenue potential and, through the demo, will determine correct pricing. If it succeeds as much as we hope it will, it could be deployed in other areas of California that also use Fastrak.
“Fastrak will facilitate B-2-C (business-to-consumer) transactions with innovative wireless technologies. Our vision is to create a national alternative to traditional payment methods to offer convenience and value to motorists and the companies from which they buy.”
However, Barbagallo also noted that, for public safety reasons, it would be foolhardy to deploy the Fastrak transponder inside wireless handsets or similar communications devices. That is because, by design, Fastrak permits toll road scanners to read the transponders in vehicles going 65 Mph.
The Transportation Corridor Agencies also are working on a plan to become a carrier’s carrier for commercial cellular carriers along the routes its controls.
“Very recently, our board of directors voted to establish cellular service through all of our corridors, some of which run through mountainous areas,” Barbagallo said.
“We have entered into discussions with a consortium of cell service providers, and we are now struggling with the issue of aesthetics.”
