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    McDonald's Expanding Electronic Pay

    Tests for cashless purchases now available at more units in Chicago, New York and California.

    In its ongoing quest to speed up fast-food purchases, McDonald's Corp. said it is expanding its electronic payment systems that let customers buy meals without the hassle of digging out bills or credit cards.

    In the Chicago area, regional operators recently voted to give their more than 400 area stores the option of letting customers purchase McDonald's menu items using the radio-frequency identification device (RFID) designed by Houston-based Texas Instruments three years ago for Irving, Texas-based Exxon Mobil Corp. Currently, the RFID devices are used primarily at Mobil convenience stores.

    Customers wave the Speedpass -- a small transponder -- at a reader located at a McDonald's drive-through's or at a counter inside the restaurant. Mobil lets customers link the Speedpass to a major credit card, which subsequently adds the McDonald's transactions to their monthly bill.

    The transponder technology has been picking up speed with fast-food chains. Some franchisees at the Taco Bell and KFC units of Tricon Global Restaurants Inc., McDonald's next-largest competitor, have been testing similar systems.

    "It's clear that cashless payments are something our customers are very interested in," McDonald's spokeswoman Lisa Howard told Reuters. The Speedpass system has been tested in nine Chicago area stores since October of 2000 before franchisees decided to expand it to their entire market, she said.

    McDonald's, based in the Chicago suburb of Oak Brook, Illinois, began a similar test in 29 Boise, Idaho, area stores in April. There, operators let customers buy food using a cashless system developed by Wayne, Pa.-based FreedomPay Inc. called MicroTrak, the report said.

    FreedomPay is also working on developing agreements with convenience store retailers that would allow customers to pay for fuel and in-store merchandise, and is expected to announce additional partnerships soon, the company said in a release.

    McDonald's first began testing cashless payment systems in Southern California more than a year ago. The system will be rolled out to as many as 50 stores within two years in New York, California and Chicago, Howard added.

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