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McDonald's CIO on why it's supporting Apple Pay on Launch Day

Bill Snyder | Oct. 17, 2014
Deborah Hall-Lefevre is making the biggest bet of her 23-year IT career.

Apple says using Apple Pay is more secure than using a traditional credit card:

"Every time you hand over your credit or debit card to pay, your card number and identity are visible. With Apple Pay, instead of using your actual credit and debit card numbers when you add your card to Passbook, a unique Device Account Number is assigned, encrypted, and securely stored in the Secure Element, a dedicated chip in iPhone. These numbers are never stored on Apple servers. And when you make a purchase, the Device Account Number, along with a transaction-specific dynamic security code, is used to process your payment. So your actual credit or debit card numbers are never shared by Apple with merchants or transmitted with payment."

Rolling With Apple Pay After the Rollout

McDonald's executives believe its customers, particularly younger ones, will quickly embrace Apple Pay. And with smartphone use practically ubiquitous in the United States, waiting on Apple Pay could be a serious competitive disadvantage, says Hall-Lefevre. "We serve 27 million customers [in the United States] every day. This is a clear and compelling business opportunity for us."

Many other retailers don't accept debit or credit cards if the transactions are too small. Some retailers charge a fee for small transactions. McDonald's accepts payment cards for all purchases, and it doesn't charge fees. The same rules will apply for Apple Pay customers. "It may be a cost to us. But in a very competitive market, it's a cost of business we're willing to accept," Hall-Lefevre says.

In general, NFC isn't widely used for payments, and the same has been true at McDonald's, according to Hall-Lefevre. The key to Apple Pay success will be to convince consumers that there's a real advantage to using it. After all, swiping a credit card isn't difficult, notes IDC's Wester.

Ultimately, that's not Hall-Lefevre's responsibility. Her job is to ensure Apple Pay runs smoothly, so just as quickly as you can answer the question, "You want fries with that?" your transaction is securely completed.

 

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