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Cellphones Businesses Software The Almighty Buck

Who's Getting Pay-By-Phone Right? The Fast Food Industry 153

Posted by Soulskill from the you-thought-it-was-going-to-be-more-interesting,-didn't-you dept.
jfruh writes "Techno-enthusiasts have been predicting for years that cell phones will become one of the main means that we use to pay for items — but most Americans stubbornly cling to cash and credit cards, mostly because cash and credit cards are infinitely more convenient. In order to woo people into buying things electronically, merchants need to make phone purchases better than traditional payment systems, not just another option. The fast food industry is leading the way with a plethora of apps that make ordering remotely a snap."
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Who's Getting Pay-By-Phone Right? The Fast Food Industry More

Who's Getting Pay-By-Phone Right? The Fast Food Industry

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  • Fastfood? (Score:5, Insightful)

    by nospam007 ( 722110 ) * on Friday October 11, 2013 @04:17PM (#45104841)

    You mean people who are too young or too poor to have a credit card use this to buy fatfood?

    Who would have thought?

    • You mean people who are too young or too poor to have a credit card use this to buy fatfood?

      I believe almost anyone can get a secured credit card.

      Anyway, my main point was that I suspect at least some of these CAN be funded with a credit card. The article doesn't mention it, but the only similar one I've used is the Starbucks app. (I rarely go to Starbucks, but have been given a few gift cards.) The funny thing is, the app gives out basically a song a week and sometimes free apps. So it's useful to inst

  • You can have my feature phone when... (Score:2)

    by Anonymous Coward

    You can have my feature phone when you pry it from my cold, dead hands. I'm not paying the difference between a low-end feature phone and a "smart" phone so that I can do something that already works fine without a phone capable of running browser exploits.

    • Should we be getting off your lawn?

    • Re: (Score:2)

      by lgw ( 121541 )

      You can have my feature phone when you pry it from my cold, dead hands. I'm not paying the difference between a low-end feature phone and a "smart" phone so that I can do something that already works fine without a phone capable of running browser exploits.

      I have an expensive smartphone and I want to trade up to a feature phone. I want physical buttons to make and receive calls, dammit - I want the phone part of the phone to be good! But I really want GPS with some sort of maps in an emergency. Anyone know a good simple phone with GPS/maps built in?

      • But I really want GPS with some sort of maps in an emergency

        If it's an 'emergency' then any basic feature phone will provide emergency services with your GPS location when you call them.

        Cue tinfoil hat brigade.

    • I'm not paying the difference between a low-end feature phone and a "smart" phone

      Pay-by-phone does not require a smart phone. I have used pay-by-phone in Japan and China with a $20 phone. Your phone just needs an NFC chip, which costs about 5 cents.

      • Why can't I just get a 5 cent thingy to put on my keychain, then?

        • Re: (Score:2)

          by macshit ( 157376 )

          Why can't I just get a 5 cent thingy to put on my keychain, then?

          Er, well, you can, sort of ... Japanese phones with NFC payment are compatible with common Japanese smart-cards, for instance public-transit cards like Suica and PASMO in the Tokyo region. These smart cards aren't quite 5 cents—there's typically about a $5 deposit on them—but they're extremely cheap compared to a cellphone, are easily recharged either automatically from a credit-card or via the ubiquitous TVMs in stations, and can be either anonymous or keyed to your name (so you can get somet

      • Your phone just needs an NFC chip, which costs about 5 cents.

        BTW, TFA does not refer to NFC payments. It refers to buying stuff with an app (e.g. saved favorite meal, credit card info saved). In my other posts, I was referring to the Starbucks app which basically replaces a separate gift card/loyalty card/credit card all in one, and gives other bonuses.

    • Feature phone? Feature phone? The only "feature" I need is "phone calls". I'm still using my Star Tac, and I likes it!

    • Smartphones aren't necessarily more expensive than feature phones now; you just have to be willing to shop around and buy one that's either low-end or refurbished/used -- the refurb LG Marquee I bought as my first smartphone in January only cost about $15 more than the Samsung Rant I picked up at Target's Black Friday sale a few years ago.

      The one place that you might end up paying more is if you're locked into a provider that charges through the nose for the mere use of a smartphone. I've stuck with no-con

  • If you not organized enough to have change/cash for a big mac or a pint in a bar you maybe should not be allowed out without adult supervision.

    • Re: (Score:2, Insightful)

      by mcgrew ( 92797 ) *

      Well, the bank closes at 1:00 Saturday afternoon, often by Monday Morning I'm out of cash and might get a breakfast burrito with my card. Phone? Crazy. Yeah, one of two things:

      1. Take out my card, swipe it, put it back in my wallet.
      2. Take out my phone, press the "on" button, swipe to unlock, hit "home", find the app, do whatever the hell the app needs me to do and... fuck it, use the fucking credit card. Using a phone to pay for a burger is retarded. It's less convenient, what's the fucking point??

      • Re: (Score:2)

        by adolf ( 21054 )

        Without reading TFA (obviously) I can see one advantage:

        Ordering. If I can order fast food from my phone, I'm a step ahead (physically) and the chances of actually getting what I want increase dramatically.

        And once I've got my order in using my pocket computer, I might as well pay for it that way too.

        I can then skip the ordering line and go straight to the pick-up counter.

        Or: If I've got several random people at the house and each of the picky bastards wants something special from $fast_food_place, I can

      • "Take out my phone, press the "on" button, swipe to unlock, hit "home", find the app, do whatever the hell the app needs me to do and... fuck it, use the fucking credit card. Using a phone to pay for a burger is retarded. It's less convenient, what's the fucking point??"

        What you cite isn't a problem intrinsic to payment by phone technology. It's an interface issue. It's like using the Windows 8 UX to conclude that desktop computers suck on principle (well, maybe all of them suck a "little").

        Moreover, when y

      • While you are waiting in line, the guy that came in behind you is ordering and paying on his phone and his stuff is ready before yours.

        At least, I think that is the point.

      • Using a phone to pay for a burger is retarded. It's less convenient, what's the fucking point??

        This! a thousand times this. This whole smartphone addiction craze is getting a little silly. Swiping my credit card is so easy, it's hard to imagine that any app could be quicker and simpler.

        This reminds me of several years ago, when a co-worker was really excited about ATM machines. At lunch time, we'd stop at the machine on the way to lunch, stand in line, and he'd enter his info. He'd take up 15 minutes - once a half hour - of our lunch time just getting money to pay for his lunch. He actually believe

        • This! a thousand times this. This whole smartphone addiction craze is getting a little silly. Swiping my credit card is so easy, it's hard to imagine that any app could be quicker and simpler.

          I admittedly only *skimmed* the article so far, but it's more than just paying. It's ORDERING and paying too. You get to skip repeating your order to someone who doesn't understand you (and yes, I'm presuming that they read the order off the screen correctly -- but they already have to do that, so I think that's safe)

      • Re: (Score:2)

        by rtb61 ( 674572 )

        I'll pay by phone the day, I can drop it from pretty much any height, sit on it, tread on it, throw it across the room onto a table, and even forget it in the wash. I can just imagine ass hat telecom incumbents rubbing their hands together at the idea of you depositing money on your phone, then dropping it and breaking it and the the Telecom provider saying that money was bound to the phone as is now gone (into their pocket). The electronic wallet has a long, long way to catch up to the durability of a typ

      • There are these things called ATM's and shouldn't you learn to budget better so that you have enough change for the buss/coffee on the way to work.

        • Re: (Score:2)

          by mcgrew ( 92797 ) *

          I don't like carrying more than a hundred dollars in cash, I drink in a bad neighborhood. ATMs are a waste of money with their stupid fees, I stopped using them years ago.

          • If your drinking more than $100 in a session more than once or twice a year you might want to cut down a bit :-)

            • Re: (Score:2)

              by mcgrew ( 92797 ) *

              Not just drinking, of course. I love good food and hate cooking, so I spend more in restaurants than in bars.

    • Using a debit card avoids flashing cash when we pay for things, which reduces the chances of being robbed. If I'm robbed anyway, I can unhesitatingly hand over my wallet to the asshole (knowing I won't be out any actual funds) and call my credit union as soon as I get home to have them cancel the card.

      It's also a hell of a lot more convenient. I vastly prefer to know where all of my money was spent, but I often don't remember by the end of the month or have the time/energy to track it all by hand. Using

      • Don't take this the wrong way but you need to get out more tracking every expenditure down to the last penny/cent is just wasting time you could be doing more fulfilling / interesting things.

        And obviously you dont pull out £200 wedge of cash at the bar just keep a couple of 10's in your pocket - and you are more likely to get robed coming away from an ATM when you take money out.

      • Using a debit card is also a lot less safe than a credit card, because a debit card takes money directly out of your account. A credit card is legally limited to $50 in losses.

    • If you not organized enough to have change/cash for a big mac or a pint in a bar you maybe should not be allowed out without adult supervision.

      It is MORE convenient AND cheaper to pay with my credit card. Why should I have to get cash/carry change/go to the ATM? (Cheaper of course refers to after the cash back, and of course I pay in full every month, so I'm getting an average 15 day interest free loan on top of the cash back.)

      • Its slower and you slow down everyone else in the queue behind you - as they say the GS guide to being a man "Always carry cash. Keep some in your front pocket." Don Draper woudl not use a credit card to by a coffee on the morning commute or martinis in a bar nuff said!

        • How is it SLOWER?

          The VAST majority of places I go to do NOT require a signature, thus "swipe my card" (which I already have out) is faster than give cash, get change, put it back in my wallet.

  • If as the summary says, cash and cards are infinitely more convenient, why then is clinging to them to be considered stubborn?

    • Re:Stubborn? (Score:5, Insightful)

      by ShanghaiBill ( 739463 ) on Friday October 11, 2013 @05:03PM (#45105209)

      If as the summary says, cash and cards are infinitely more convenient, why then is clinging to them to be considered stubborn?

      Because the author is a moron. Cash and cards are NOT more convenient, they are less convenient. When I go out, I always take my phone so people can contact me. So if I can use my phone to buy stuff, then I don't need to carry cash or cards. Where I live (California) I don't even need a wallet to drive, because it is legal to show a cop a photo of my drivers license on my phone. As soon as I can start my car and open my front door with the NFC chip in my phone, then I will only need ONE THING in my pocket when I leave my house. What could possibly be more convenient?

      The lack of phone-money in America has nothing whatsoever to do with customers being "stubborn". It is because of the fragmentation of the American cellular system, and the lack of cooperation among the vendors. Once they finally agree on a standard, phone-money will be adopted by consumers in America just as quickly as anywhere else.

      • Re: (Score:3)

        by plover ( 150551 )

        Sorry, but many times paying by phone is seriously inconvenient when compared to a simple credit card. You have to unlock the phone, find the right payment app and open it, find the payment option and pick it, enter another PIN, show some barcode to the cashier, and then it still takes as long as a credit card to approve. Compared to pulling the card from my wallet and swiping it, it's about five times slower.

        The place where pay-by-phone gets it right is Stabucks. People are just standing around, tweeting a

        • Sorry, but many times paying by phone is seriously inconvenient when compared to a simple credit card. You have to unlock the phone, find the right payment app and open it, find the payment option and pick it, enter another PIN, show some barcode to the cashier, and then it still takes as long as a credit card to approve. Compared to pulling the card from my wallet and swiping it, it's about five times slower.

          That's now how the ideal system is supposed to work, nor how it really does work anywhere. Most places handle pay by phone via a phone equipped with an NFC chip you just swipe over a payment spot and it charges you, no unlocking the phone, no pin, navigating to your payment app of choice, none of that crap. It effectively turns your phone into a card. If you want to consider convenience, it's more so because you don't have to pull out your wallet, then the card, then swipe it. You just pull out the phone an

          • Geh, I hate typos. The first sentence is supposed to say "That's not how the ideal system is supposed to work"

          • Re: (Score:2)

            by plover ( 150551 )

            If you want a lame version of the experience, you can buy a cell phone case that has a pocket for a credit card in the back, and they supposedly work with NFC readers.

            The problem with changing the systems are the profit models in the current system. Google wants to track your brick-and-mortar purchases. Retailers don't want to pay Visa's interchange rates. Visa and the PCI cartel don't want any competitors. Acquiring banks don't want a system that bypasses them in favor of a direct-to-bank model. So anyone

      • Re: (Score:2)

        by MonkeyPaw ( 8286 )

        Because the author is a moron. Cash and cards are NOT more convenient, they are less convenient. When I go out, I always take my phone so people can contact me. So if I can use my phone to buy stuff, then I don't need to carry cash or cards. Where I live (California) I don't even need a wallet to drive, because it is legal to show a cop a photo of my drivers license on my phone. As soon as I can start my car and open my front door with the NFC chip in my phone, then I will only need ONE THING in my pocket when I leave my house. What could possibly be more convenient?

        The lack of phone-money in America has nothing whatsoever to do with customers being "stubborn". It is because of the fragmentation of the American cellular system, and the lack of cooperation among the vendors. Once they finally agree on a standard, phone-money will be adopted by consumers in America just as quickly as anywhere else.

        And when you lose your phone, you're hooped.

      • Re: (Score:3)

        by icebike ( 68054 )

        The lack of phone-money in America has nothing whatsoever to do with customers being "stubborn". It is because of the fragmentation of the American cellular system, and the lack of cooperation among the vendors. Once they finally agree on a standard, phone-money will be adopted by consumers in America just as quickly as anywhere else.

        Its fragmented in every country, except where it is state run.

        The thing is, the carriers have VETOED NFC payments. Why they get a say, I have no idea, If we had any integrity in Washington, the carriers would be out of the decision loop by a simple written order by the FTC or the DOJ. The one carrier that allows it is Sprint (IINM). Every other carrier refused to even allow Google Wallet to be installed.

        The carriers should NOT have a say. Its just data. Encrypted data. Its TCP/IP. Just like web page

      • As soon as I can start my car and open my front door with the NFC chip in my phone, then I will only need ONE THING in my pocket when I leave my house. What could possibly be more convenient?

        Ever been mugged? Limiting my liability to $10 in cash worked out really well for me.

        Ever wanted to go for a walk in the rain, and stop along the way to buy a beer?

        Ever wanted to be offline so you can have time when you're not in contact telephonically? (or tracked)

        Ever had to dispute a charge?

        Ever run out of a charge

      • Where I live (California) I don't even need a wallet to drive, because it is legal to show a cop a photo of my drivers license on my phone.

        Huh. What if your phone battery (or your whole phone) decides to die when you get stopped?

        I'm guessing you still have your real physical license on you.

      • Where I live (California) I don't even need a wallet to drive, because it is legal to show a cop a photo of my drivers license on my phone.

        This isn't meant to be snarky. Can you provide a citation for this?

    • Re: (Score:2)

      by icebike ( 68054 )

      If as the summary says, cash and cards are infinitely more convenient, why then is clinging to them to be considered stubborn?

      The summary is wrong, and so are you.

      The reason we have very few Phone payment options in the US is that the Carriers somehow obtained a veto of this service.
      Some networks allow it and those users can "pay by bonk" at lots of places. Most networks won't allow payments via NFC, because they want a piece of the action for carrying that tiny bit of encrypted data, as opposed to huge gobs of encrypted web pages. It sounds like illegal restraint of trade if you ask me.

      Some networks (AT&T) are going so far

    • When someone wants to sell you something, denigrating whatever that something is intended to replace is part of the pitch.

      My phone is convenient...until it breaks. Phones are more delicate than cards.

      My card is convenient, until communication is interrupted between the business I'm patronizing and their credit processor. Not acceptable when I need fuel on the road.

      Cash is pretty reliable. I'll ADD tools, but only when they serve me.

  • NOT pay-by-phone (Score:5, Informative)

    by soundguy ( 415780 ) on Friday October 11, 2013 @04:37PM (#45105003) Homepage

    This has precisely jack squat to do with "pay-by-phone". The article is about "order-by-phone". In the case of the author, he has a credit card on file with a fast food burger joint staffed with high school drop-outs (what could possibly go wrong) and the order is placed, charged, and processed thru the restaurant's internet-facing computer system. It's no different that buying something from Amazon except that you have to go get the product yourself instead of having it delivered by UPS

    • "Card on file."

      You mean, like every other person you gave your credit card or handed a check to?

  • Speed and reducing cost (Score:4, Informative)

    by EMG at MU ( 1194965 ) on Friday October 11, 2013 @04:39PM (#45105019)
    I use to work in the store systems group of a major fast food chain. Having the customer order via app and pay via phone reduces the chances that cashier messes up the order, reduces the amount of money stolen because the cashiers handle less cash, and just reduces the need for cashiers.

    If you can get 20% of your customer base ordering via an app, thats one less casher you have to train and pay to stand at the counter and take orders (made up the number but you get the point). The orders also come in in parallel, you have to pay more cashiers if you want people to take orders in parallel.

    One big problem QSR franchises have is that the people applying for the jobs don't know english. Look over at a McDonalds register, its mostly pictures and numbers on the screen, with very few words. If you can get the customers to order themselves you don't have to pay as many english speakers to be cashiers and thus you can pay lower wages. You don't have to know english to work in the kitchen.

  • Pay by phone apps require outrageous permissions (Score:5, Informative)

    by knorthern knight ( 513660 ) on Friday October 11, 2013 @04:48PM (#45105081)

    A few reasons I will not use pay-by-phone in its current state.

    http://www.citeworld.com/security/22535/mobile-payments-apps-outrageous-permissions [citeworld.com]

    * Google Wallet
    * Camera -- Allows the app to take pictures and videos with this camera. This permission allows the app to use the camera at any time without your confirmation.
    * Read your contacts -- Allows the app to read data about your contacts stored on your phone, including the frequency with which you've called, emailed, or communicated in other ways with specific individuals. This permission allows apps to save your contact data, and malicious apps may share contact data without your knowledge.

    * Paypal
    * Retrieve running apps -- Allows the app to retrieve information about currently and recently running tasks. This may allow the app to discover information about which applications are used on the device.

    * Starbucks
    * Phone calls -- Allows the app to call phone numbers without your intervention. This may result in unexpected charges or calls. Note that this doesn't allow the app to call emergency numbers.

    • Re:Pay by phone apps require outrageous permission (Score:5, Interesting)

      by tompaulco ( 629533 ) on Friday October 11, 2013 @05:17PM (#45105311) Homepage Journal
      I have actually not updated any apps on my phone in about 3 months because every single one of them wants access to the camera, contacts, emails, location and a bunch of other crap that I am just not going to allow.

      • You could install any of a number of permissions apps, like permissions free, to control what apps are permitted to do what. I haven't updated ebay or paypal in a while either, but sooner or later the apps will probably cease to function.

  • As a non-coffee drinker I've been told by multiple people that Starbucks of all places is very proactive about this stuff. I think they had an app for the original iPhone almost right when the Appstore opened that laid some of the framework like being able to save billing info in the app along with giftcards. Clearly certain companies payed enough attention early on to realize that NFC or something like it was coming soon and it was a good idea to get people used to the concept of using their phone in the t

    • Getting you in and out as quickly as possible is their goal.

      Completely wrong [wallstcheatsheet.com]. Lingering is the goal. Customers who linger buy more.

      The main cost for these retailers isn't the food/coffee they serve it's the time and space you take up as you order it and then have to wait for all the inefficiencies with cash, cards, or checks.

      Nope, it's health insurance [go.com]. After that, it's definitely cost of goods sold [businessweek.com]. Operating expenses like "cash handling" aren't even a blip.

  • Don't read this it's an advertisement. Short story buy brand X fast food using phone app to jump queue. You can save favourites.
    Doesn't require any new technology or systems
    As an aside, the current payment systems are insecure and cost too much. Show me something that is as cheap, convenient and anonymous as cash. Sure it doesn't make company X rich but that's not my job. Find me the visa replacement with lower margins and better security.

  • Surcharges (Score:4, Interesting)

    by arthurpaliden ( 939626 ) on Friday October 11, 2013 @06:43PM (#45105787)
    Want people to use it. Get rid of all surcharges related to it. I don't have to pay extra when I use cash.

    • Re: (Score:2)

      by dkf ( 304284 )

      Want people to use it. Get rid of all surcharges related to it. I don't have to pay extra when I use cash.

      That's because the cost in cash is set by law to the minimum amount that you can charge — that's what "good for any debt, public or private" really means — so it ends up dragging up all prices. This particularly applies at a larger retail business (e.g., supermarket) where they have to have multiple armored cars arriving per day to take the cash to a bank, and can also have a significant impact on employee theft levels. It's also very stealable by third-parties, so you'll have to be getting insu

  • My small business cannot afford it (Score:2)

    by Anonymous Coward

    Cash is king in my shop.

    I make and sell small items. These sell for about $50. Parts and supplies cost $30. Labor and counter help adds in about $4. Rent and non-sales taxes adds another $10. So, on a typical non-holiday day, our net markup is about 10 to 15%. That's not much. Every electronic billing system eats upwards of 2.7% of each sale. The more high-tech sysetems chew up more. We have pay for the hardware, installation, maintenance, and monthly support ("Trustkeeper" nonsense to scan our sy

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