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Carroll School of Management

Apple Pay

Stephen J. Easterbrook

President and CEO, McDonald's

Steve Easterbrook - Takeaway 1 from Chief Executives Club of Boston on Vimeo.

Excerpt from remarks to Boston College Chief Executives Club  

February 2, 2017

TAKEAWAY: Apple Pay

So, moving quickly, and my mission to try and take risk, take smarter risks—again, any one of us as leaders of our businesses can stand up and say this stuff that actually—if you can get the tangible actions and demonstrate it through meaningful action—again, always on the customer agenda then. I’ll just give you one more example. Again, I’m only sharing these because it may just trigger conversation later through Q&A. This was in 2015, and Apple came to us. Apple knew what we could bring to some of their initiatives because we’re in 14,500 communities around the US. Our owner/operators—we employ 900,000 people here in the US. Also, as I say, we serve 27 million people a day.

So, they wanted to launch Apple Pay, and try and introduce a whole new method of payment. They asked us would we be interested in being a launch partner for Apple Pay. Clearly, the answer is yes, but they have a launch date. As you know, they have these big events in Cupertino. They gave us 12 weeks’ notice. Not to come back with a decision that we’ll be interested, but to get it done and implemented and executed in 14,000 restaurants from a technology point of view, from a crew training point of view, and the rest. We decided we were going to use this totally as a wonderful opportunity to test ourselves as how good can we be if we rally behind something and show the urgency.

None of these things are perfect, but if you think about the discussions—this is the funny thing about McDonald’s. When it comes to it, we’re a real grassroots, nuts and bolts type of business. So, the biggest challenge we had on the entire 12 weeks was dealing with customers and handling customers who want to pay with Apple Pay in restaurant, not a problem. Here’s the problem. It’s the drive-through customer. Because when they come up pay, they want to pull up to the drive-through window and they want to wave a phone. But you don’t want them to pass the phone to you to handle because there’s all sorts of liability issues with that, and the scanner’s in the drive-through—the scanner's there next to our Pulse system. So we had to find a way to get the scanner effective on a pretty crude arm that would leave out of the window such that driver—if it was their watch or if it was their phone—would be able to hold against the scanner, they were in total control of the entire process. They had full ownership of it, and we were able to capture the payment.

So, the biggest problem is manufacturing these arms. It wasn’t the technology. It was not just manufacturing, but then getting them installed, in—I guess out of 14,500—around 11,500, 12,000 drive-throughs, and then getting our crew trained on it. So, anyway, I share that partly because it is part of the nuts and bolts of the discussions we end up having around our business, but actually the great news was we got it done and we were a launch partner for Apple Pay, which again, I think disrupted people’s thinking about—I didn’t see McDonald’s being on the forefront of this type of technology. I didn’t think they could move that quickly. You know what? Externally, is it a huge business builder? It will be over time. Actually, internally as a cultural signal to ourselves about what we can do when we adopt the right attitude is something that, as you can imagine, I do come back to a few times.