Not long ago, fast-food restaurants were considered laggards because they did not take credit or debit cards, well after most high-volume retailers — like supermarkets and drug stores — had begun accepting them.

Today, some fast-food chains have leaped to the forefront of experimentation with payment cards and mobile acceptance devices. Several that used to be cash-only are testing futuristic systems in which patrons wave key-chain tags and other gadgets in front of terminals that can read them.

McDonald’s Corp. has been testing a wireless payment transmitter, Speedpass, for five months at eight Chicago-area restaurants. When the Speedpass “wand,” which attaches to a key chain or car window, is waved in front of a terminal at a countertop or drive-through window, it communicates the account number of the credit or debit card assigned to it, and the transaction amount is charged to that card.

In another pilot, four McDonald’s restaurants in Orange County, Calif., allow customers to pay using California’s Fastrak toll-payment transponders. Some independently owned McDonald’s franchises already accept credit and debit cards at standard point of sale terminals, but others do not.

In Raleigh, N.C., the owner of two Taco Bell franchises is experimenting with a mobile payment technology called 2Scoot. The owner has given 2Scoot tags to 450 frequent customers, who can choose a key-chain tag or one that attaches to a cell phone. Customers touch the tag to a reader as they wait in line, and when their order is filled, they touch their tag to a reader at the register, their card is charged, and a receipt is printed.

“In fast food, speed is part of the service,” said Armen Khachadourian, senior vice president of merchant sales and integrated solutions at Visa U.S.A.

While corporate owners of fast-food restaurants are showing a willingness to experiment with cards and point of sale systems, individual franchise owners often must be convinced that credit cards won’t slow service or cost too much, Mr. Khachadourian said.

For example, Burger King accepts credit cards at 100 of its 502 corporate-owned stores, and is in discussions with American Express Co. to begin accepting that card at all its stores. But because most Burger Kings are owned by individual operators, corporate sponsorship will not necessarily translate into widespread card acceptance.

The new mobile systems — which often piggyback on devices that are already in use for highway toll collections and fuel payments — may have a better chance at becoming pervasive because they are faster than traditional card-swipe terminals. They are also particularly useful at restaurants that do a brisk drive-through business. The Speedpass that McDonald’s is testing was developed by Mobil Oil Co. in 1997 to allow customers to use credit cards to pay at the gas pump.

So far, the results of the five-month pilot have been good enough for McDonald’s to plan to move forward, but some problems need to be solved before the program goes national. “We have learned a few things,” said Mr. Khachadourian of Visa, which is helping conduct the Speedpass pilot. Among them was that consumers in drive-through lanes found it impractical to remove their keys from the ignition to hold them up to the transponders.

Speedpass appeals to fast-food restaurant operators because of the large number of people who already carry it. Despite a limited number of gas stations where Speedpass works, 4.6 million consumers have made space on their key chains for it. About 300,000 Californians carry Fastrak toll-payment transponders, which debit a payment card for highway tolls.

The system being tested by Taco Bell, which is owned by Tricon Restaurants International of Dallas, is made by a technology vendor called Commerce Systems Inc. of Kingston, N.Y. An executive at the technology firm said Tricon has expressed interest in using the system at its KFC and Pizza Hut chains.

Officials at KFC, Burger King Corp., of Miami, and Subway Restaurants, of Milford, Conn., acknowledged that they were experimenting with various forms of credit card payment systems, but did not want to discuss particulars lest they tip off their competitors.

Unlike grocery stores — which were slower than most retailers to accept card payments, but moved quickly once they started — fast-food restaurants have been migrating gradually toward card adoption. “The reason for that is technology,” Mr. Khachadourian said. “Unlike supermarkets, technology implementations here have not been as easy.”

According to figures supplied by Mr. Khachadourian, $40 billion was charged on Visa cards at supermarkets last year, up from $450 million in 1991. At fast-food restaurants, Visa saw $1 billion in charge volume in 2000, up from $10 million in 1991. Since about $110 billion was spent at fast-food chains in 2000, Visa payments accounted for less than 1%.

Though key tags offer the promise of fast payments, a growing number of fast-food businesses are unwilling to wait. Spurred on by the success of credit cards in so-called quick-serve family restaurants such as Pizza Hut, they are taking credit cards the old-fashioned way, by swiping them in terminals.

A Subway spokeswoman said that although the company did not track card acceptance at its 12,300 U.S. stores, at least 3,000 of them accepted cards. A Burger King spokeswoman said some stores already take credit cards using regular terminals. American Express says it has card-acceptance contracts with many fast-food restaurants, some independent, some corporate-owned.

“A lot of customers would not come in if I did not take credit cards,” said Murad Fazad, president of Favel Development Network of Rosemont, Ill., which owns three Subway outlets and one Taco Bell, all in downtown Chicago. “About six or seven years ago, I was laughing at another franchisee who was gung-ho on credit cards.”

Mr. Fazad said he used to worry about high interchange fees and lengthy transaction times, but changed his mind, and now believes accepting credit cards attracts more customers.

“It used to be for really big orders, but now it is every day” that customers use credit cards to make purchases, Mr. Fazad said. “I would not see those sales without credit cards.”

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