Mastercard: Drive-Thru Profits?

Forget your credit card. Soon you will be able to pay for a burger and fries at the drive-thru with no more than your voice, and you may even get a custom menu.

Mastercard (MA) recently announced that it is partnering with a pair of start-ups to remove cashiers from the fast food business. It’s another shot fired in its war against cash, and friction. Rest assured, the Purchase, NY-based company is going to win.

Executives at Mastercard have been trying to kill cash for a long time. The company forte is digital payment processing, for which it earns a small but durable fee on every transaction. Cash payments are the direct competition. Killing it has been great for business.

Mastercard has posted middle teens sales growth since 2016. Last year revenues reached $16.9 billion, a bump of 13% versus 2018. That’s because from governments to retailers, digital payments are preferred.

Uncle Sam gets to track money all the way through the system. Getting rid of cash makes it much more difficult for black marketeers and tax cheats. Retailer gets the other end of transaction, tracking customers.

Unlocking fast food, referred to as “quick service restaurants” in industry jargon, opens up a treasure trove of new digital gold. Customers will pull up to the drive thru where they will be greeted by an artificial intelligence enabled voice assistant.

Once the customer’s voice print is authenticated, they’ll get a personalized menu based on past orders, the weather or time of day. Behind the scenes, Mastercard tokenization and biometrics software will match the voice print with a credit card, and the purchase will be completed.

There will be some challenges along the way. Artificial intelligence voice assistants, can be hit and miss at best. It remains to be seen how well the speech recognition systems will work in practice.

Investors shouldn’t be surprised Mastercard is investing heavily in this area. The sector is built for speed and contactless payments means no more customers digging through their wallets searching for bills, or staff fiddling to make change.

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