Radio-Frequency-Based Payment System Is SpreadingRadio-Frequency-Based Payment System Is Spreading

RFID is hot this summer, and trials of radio-frequency-identification systems are spreading quietly across the retail and payment sectors. Two more McDonald's have jumped on board, as brothers-in-law Dean Sandbo and Stan Abrahamsen last week began accepting EZPass, the radio-frequency-based East Coast toll-collection system, for payment at the drive-through windows of their Long Island outlets.

Sandbo says the two kicked the idea around a couple of years ago, but got serious and took it to McDonald's corporate as word of RFID tests at other outlets reached them. The biggest of those tests so far includes 40 Chicago-area McDonald's that are accepting the Mobil SpeedPass for payment.

On the retail side, meanwhile, corporations from Procter & Gamble Co. to Wal-Mart Stores Inc. are testing the use of radio frequencies to track goods along the supply chain. The San Francisco airport is testing a new baggage system that uses one-inch-square RFID tags to track and direct suitcases.

Citing "clear direction from McDonald's not to talk about cost," Sandbo declined to give exact fees for each transaction, or even to say whether it is lower than the 2% to 3% he would have to pay in credit-card fees. But the brothers-in-law have never accepted credit cards in their restaurants. Sandbo did say that customers love not having to fumble for cash to pay for their Big Macs and Happy Meals. When customers place their orders, McDonald's employees ask whether they want to charge their meals to the EZPass; if customers opt to use the system, they get an EZPass receipt instead of handing over cash when they drive around to the window.

With a "nice base of existing tag holders" among the local residents and the tourists catching the ferry from Port Jefferson to Connecticut, Sandbo says, "how can you go wrong?"