Thirty McDonalds outlets* in France will be accepting PayPal, using the eBay-owned processor's mobile client, as companies race to become the default mobile payment platform whether customers want it or not.
The deployment is only a trial, and Reuters notes that (in common with McDonalds branches around Europe) the sites are already wired for Near Field Communications (NFC), and therefor already accept pay-by-bonk in exchange for burger meat. The deal is still significant, however, as a proper deployment with McDonalds would provide desperately needed credibility to PayPal whose mobile offering is still only accepted in a handful of frock shops.
But the potential of mobile payments is such that everyone wants a slice, and will fight to get it. Earlier this month, Starbucks chucked £16m at darling-of-the-Twitterarti Square, promising to integrate the consumer payment platform into its Starbucks app and "in-store digital network" – which we take to mean the Wi-Fi landing page. That's more important than it sounds, as the Starbucks app will let customers check if stores nearby will accept Square's particular barcode-on-screen payment variant.
Square, and PayPal, reckon the credit-card duopoly of Visa and Mastercard is ripe for disruption. Their lower fees reflect less services – there's no free insurance or fraud protection with PayPal, but millions online users don't care – and the duopoly's alternative, NFC, is still struggling to get on its feet.
NFC payments, aka pay-by-bonk, are already possible with the majority of credit cards in Europe, and almost all cards now issued have the technology embedded (whether customers want it or not), but despite having it in their wallets customers don't seem interested in using it. Pay-by-bonk phones have been launched in the UK and America, to a resounding lack of interest despite sticker schemes which promise to turn any phone into a bonking phone, but there's too much at stake not to keep trying.
Handling cash is hugely expensive, the flexibility of scratch-window cash makes it attractive to thieves from inside and outside the orgainisation, and the logistics of moving such a stealable commodity around are considerable. Which is why supermarkets put so much effort into trying to give it away, asking "you want cash back?" at every opportunity. For small transactions the credit card fee is too high, but for larger transactions no one wants to take cash any more.
So everyone (except some customers) wants to stop dealing in cash, which is bad news for those involved in its physical security but means there's a massive new market to be exploited and a chance for new entrants to get a foothold. Visa and Mastercard have seen off challenges from the mobile network operators, and are confident that their overreaching brands will serve them well.
Bagging Starbucks is a big win for Square, bagging McDonalds would be an even-bigger win for PayPal, but neither outlet will stop accepting NFC cards and phones from the existing duopoly. Customers wanting simplicity will likely end up with the usual options, unless they limit their eating-out spending to McDonalds or Starbucks, at least until the disrupters actually manage some disruption. ®
* McDonalds insists on callings it's branded outlets "restaurants", but we can't bring ourselves to use the term.
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