Burger King Seeks Edge Over McDonald's in Mobile-Payment Battle

  • Tech superiority could help one chain lock in customers
  • Burger King aims to roll out mobile ordering nationally soon

McDonald's Posts Surprisingly Strong Sales Growth

In the fast-food industry’s race to let customers order and pay with their phones, Burger King is seeking an early lead on McDonald’s Corp.

The chain has been testing mobile-payment technology in the Miami area since December and is looking to introduce it more broadly soon, according to Jose Cil, Burger King’s president. That will set the stage for a national rollout within months.

The contest to get the technology out first represents the next big battle for burger joints. Though Starbucks Corp. and pizza chains have been using mobile-ordering apps for years, the biggest fast-food companies are now trying to catch up. McDonald’s is planning its nationwide debut by the end of the year, potentially giving Burger King an opportunity to move ahead of its far-larger rival.

An app that lets users order and complete purchases via a mobile phone would help Burger King build a tighter connection with customers, Cil said.

“Our guests want to interact with us in more convenient ways, and we’re looking to put our brand in the palm of their hands,” he said.

The burger chain, part of Restaurant Brands International Inc., declined to give an exact date for a national introduction of the app. McDonald’s also wouldn’t comment on the specific timing of its mobile-pay technology, beyond reiterating its target for some time in the fourth quarter of the year.

“We have been focused on restaurant integration to ensure our customers enjoy a seamless experience and more convenience than ever before,” Terri Hickey, a spokeswoman for Oak Brook, Illinois-based McDonald’s, said in an email. The technology will offer “the flexibility to pick up their order at the front counter, the drive-thru or with new curbside delivery,” she said.

Heavy Promotions

For Burger King, the stakes are particularly high. The company has had to fight harder for customers this year, and the entire fast-food market is relying heavily on discounts and promotions to prop up results. In March, U.S. industry same-store sales fell 0.6 percent, declining for the fourth straight month.

Against this backdrop, McDonald’s has been outdueling Burger King. Thanks to a Big Mac overhaul and beverage specials, the Golden Arches posted surprisingly strong sales last quarter. Burger King reported a decline.

A mobile-payment app would help lock in customers by breezing them through the purchasing process. Customers can use their phones to order food before they even arrive at the restaurant, and then pay for it automatically -- avoiding the fuss of registers or wallets.

Starbucks has had a mobile-pay feature for years, helping popularize its app and rewards program, which now boasts 13.3 million domestic members. But even Starbucks’ largely successful experience has brought hiccups: So many of its customers now bypass the register area that they tend to bunch up at the pickup station, creating congestion.

Early Tests

McDonald’s, the world’s biggest restaurant company, began testing its technology in March in Northern California and Spokane, Washington. Wendy’s Co. also has been experimenting with mobile ordering. It’s currently available in Phoenix; Portland, Oregon; Austin, Texas; and Columbus, Ohio.

Restaurant Brands also is working on a mobile order-and-pay app for its Tim Hortons coffee chain. The company plans to introduce it later this year, Chief Executive Officer Daniel Schwartz said during a conference call.

The company, which bought fried-chicken chain Popeyes Louisiana Kitchen earlier this year, may do the same with that concept.

“It’s a little bit early to comment on Popeyes, but ultimately we’ll look to bring a digital channel to that brand as well,” Schwartz said.

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