Big Mac, KFC start mobile pay in China

Yum Brands Inc's KFC and McDonald's Corp, the two US giants in the fast-food industry in China, will run pilot programs for mobile payment in China through Alipay.

Mobile payment has been gaining prevalence in the United States, where it has been adopted by chains such as Starbucks Corp.

US restaurant chains are looking to use the technology in China to capture business in a country with more than 500 million smartphone users.

Earlier this month, KFC reached an agreement with Alipay, the third-party mobile-payment service of Alibaba Group Holdings Ltd, to provide the service at 700 of its 4,500-plus restaurants in Shanghai and Zhejiang province. KFC plans to expand mobile payment to all of its restaurants in China after the trial run.

According to a statement on the KFC China website, customers can pay for their in-store orders in a few seconds by scanning bar codes generated by Alipay.

"Compared to cash payment, mobile payment is much more convenient for both customers and cashiers, which definitely would improve the efficiency of operation," KFC said in the statement. "Mobile payment is developing into a general trend. KFC wants to provide customers more convenient and trendier payment options, like Alipay."

"McDonald's will start trailing mobile ordering and mobile payment under a pilot program (with Alipay) in the third quarter this year in China," Becca Hary, McDonald's director of global media relations, wrote in an e-mail to China Daily.

In October 2014, when Apple launched its mobile-payment application Apple Pay, McDonald's provided the service at 14,000 of its US restaurants.

"Consumer lifestyles are evolving and we're meeting the demands of a highly-digital lifestyle in China," Hary wrote.

US retail giant Wal-Mart Stores Inc started a trial program with Alipay at its 27 stores in Shenzhen in May, which the company said has reduced checkout lines in those stores.

Expert predicts that mobile payments will take off faster in China than in the US because credit card payment in China has not been as common there.

"Of course mobile payment is convenient," said Wu Xiaowei, who ordered using Alipay in a KFC restaurant in Shanghai this month.

"But in turn, that doesn't represent customers would choose retailers or restaurants accepting mobile payments intentionally," Wu said. "I think that explains that the mobile payment in China develops slowly. The only impetus is the mobile payment application company," said Wu, sales supervisor of the Beast, a Chinese high-end brand selling artistic household items online to offline.

Forrester analyst Wang Xiaofeng said that many Chinese consumers are using mobile payment rather than cash, which results in more homegrown retailers and restaurants accepting mobile payments.

"Convenience is really important," Wang said. "If you don't provide it, your competitor will."

Hong Xiao in New York contributed to this story.